High Deductible Health Plans and HSA (esp for fed employees)

[ebella]

We're healthy, early 40s DINKS, with $224,000 combined annual income and almost $500,000 in retirement/savings maxxing our 401ks and Vanguard IRAs so trying to think of where else we could invest to get some tax advantages.  We don't currently have any diagnosed health issues requiring prescription meds or ongoing professional treatment but have been paying $4882 annually for Kaiser plus a $3000 FSA.  I'm curious about HDHP with a HSA and if it would save us more money in long run and allow more flexibility in providers.
My spouse never goes to the Dr unless he's in acute distress (like a broken tooth or a concussion), but probably has undiagnosed Alphagal and eczema.  I'm incredibly allergic to dust and slightly overweight so I have monthly allergy shots take 2-3 different OTC eye drops and a nasal spray everyday.  I've used phentermine for weight-loss for the last 6 mo and lost 25 lbs, so expect to taper off in next mo or 2 after I lose an additional 5-10 lbs. I use insurance for annual preventative care and the occcasional mediocre telehealth and nutritional counseling Kaiser offers. 
We don't know anyone in our age/income cohort who has used a HDHP with a HSA so would love to hear peoples' experiences (especially in you're a fed and have used one of those options) or opinions/suggestions about our situation.

[Fomerly known as something]

I have GEHA HDHP.  (Sink 40s Fed).  I’ve also used the AETNA one been HSA for10 or so years.  Add up your costs from your side (copays and what not) see how it compares to the deductible.  GEHA passes through $1000 for single, (not sure on the family/plus 1 plan) to my HSA.  Urgent care if needed generally runs me between. $150-300.  For well visit preventative care I pay nothing.

Generally if one is either very healthy or very unhealthy a HDHP is the best, in the idle it’s more of a toss up.

[rockeTree]

CareFirst HDHP here. If you are going to max out the tax advantaged space, it's a good deal for most people and certainly for my family. You can't beat the no ss taxes, no income taxes going in, no income taxes coming out. I think there's a tab on the case study spreadsheet that gives more detail specific to your state and federal tax brackets so you can play with various levels of spending and see where your break-even is.

[sonofsven]

Have you looked into what plans are available to you, and what the deductible and max oop are, as well as the monthly cost? You need real numbers to make a comparison.

I was like your spouse, I never went to the doctor except for the emergency room as needed, so a high deductible HSA plan made sense, and enabled me to build up a nice balance.
Now I'm in my late fifties and needed some work done so I switched to a silver cost sharing  plan with a much lower deductible and max oop, and saved about $6k ($2k max oop vs $8k). It's nice that you can switch back and forth, but the deductible goes back to zero on January 1, so don't start getting sick in the fall, wait til spring ;-)

You'll need to fill the family deductible, until then everything is out of pocket. And then you'll generally pay coinsurance, where the insurance will pay a certain percentage of your costs, until you reach your max out of pocket, then everything is covered (as long as it's approved, in network, etc). Sorry if you already know all this, but the max oop number is the most important one. You also need to check which hospitals, clinics, etc are in network in your chosen plan. In my area there are 3-5 different HSA plans to choose from and they don't all cover the same places.

Also, my plans have never covered dental or prescription glasses, that might be something that is covered in your present insurance.

It is hard to know how much you will spend out of pocket because it's really hard to know what you will pay vs what your insurance has been paying, even looking at your bills it's hard to figure out. But try to come up with an estimate.

I put all my medical spend on cc's anyway for the sign up bonuses, and never take anything out of the HSA. In my opinion they are most worthwhile if you invest them long term.
I think of them as an extension of my emergency fund; there's enough in my e fund to cover the max oop in a medical emergency until the insurance starts paying out.

Overall I recommend them, as long as you are able to cover what will likely be a very high max oop in a worse case scenario.

[yachi]

I had an HDHP plan that covered 100% after the deductible, this meant that the OOP max was functionally irrelevant as the only remaining cost was the ~$20 office visit charge.

One thing to keep in mind with HDHP is your prescriptions are not covered (maybe they are once you meet the deductible?).  This is a required feature for the plan to have an HSA.  If you're on reoccurring medication, try and find out what it costs without insurance.

[Sugaree]

GEHA HDHP has been better for me vs. BCBS Basic every year that I've tracked it (switched to GEHA in 2020).  Even in the year that we hit the deductible.  For example, assuming that nothing major happens before the end of the year, I will be just over $4000 better off with GEHA. 

Before I switched, I sat down and made a spreadsheet of what I'd spent on healthcare the previous year or two and compared what I spent on BCBS vs. what it would have been on GEHA (I used the BCBS negotiated amounts as an assumption on my costs).  I also ran a worst-case scenario both with expensive treatments (for example, the whole family getting into a car accident) and expensive prescriptions.  The only scenario that didn't work out in my favor would have been an ongoing, expensive prescription. 

[roomtempmayo]

My spouse never goes to the Dr unless he's in acute distress (like a broken tooth or a concussion), but probably has undiagnosed Alphagal and eczema.  I'm incredibly allergic to dust and slightly overweight so I have monthly allergy shots take 2-3 different OTC eye drops and a nasal spray everyday.  I've used phentermine for weight-loss for the last 6 mo and lost 25 lbs, so expect to taper off in next mo or 2 after I lose an additional 5-10 lbs. I use insurance for annual preventative care and the occcasional mediocre telehealth and nutritional counseling Kaiser offers. 
We don't know anyone in our age/income cohort who has used a HDHP with a HSA so would love to hear peoples' experiences (especially in you're a fed and have used one of those options) or opinions/suggestions about our situation.

It sounds like you're currently on a family plan, and you're thinking about a change for both of you.

You may also want to at least look at carrying separate insurance, since you're a routine user and your husband isn't.

My wife and two year old daughter are both on her employer's Cadillac plan, and I'm on an HDHP with HSA through my employer.  The tax incentive for the HSA is significant in your tax bracket (probably $1500+/yr for maxing an individual account), and it's not use-it-or-lose-it like FSA money.

[Fomerly known as something]

On Dental with GEHA, I pay about $30 after just health insurance (I don’t have supplemental) per visit for cleaning.  I’ve had cavities recently and they run about $600 a tooth where I live.  I don’t regurally get my eyes checked but fell it could be similar.

[kite]

An HDHP became available to me in 2010 at age 43 and I seized the chance. No matter how I ran the numbers if we were high users of medical care or rare users of care, the premium difference and the deductibility of contributions more than made up for any out of pocket costs.

Over the years, we paid our incidental health expenses out of cash flow, I’ll reimburse myself if/when I need the money. In the last two years, we had significant OOP expenses, meeting our OOP max. A chronic condition, a lingering effect from a (probably) Covid related blood clot, will mean hitting the max OOP forever. And I can safely cover that expense from my HSA balance for my projected life expectancy. It’s the best of both a deductible IRA when working and a Roth IRA when you need to take the money out. In a shit-hits-the-fan scenario, you can use your HSA to pay for COBRA benefits, too.

Obviously, YMMV, but do run some numbers for yourself. It’s almost always better to have an HSA available to you, particularly as there are HSA’s with excellent investment options.

 

[ebella]

Have you looked into what plans are available to you, and what the deductible and max oop are, as well as the monthly cost? You need real numbers to make a comparison.

There's a bunch available. GEHA ($3300-3600 deductible and 12000-17000 oop, depending on whether in network, $2000 contribution) MHP ($4000 deductible and 12-15 oop, $2400 contribution) and CareFirst BlueChoice (only 6600 deductible and 15000 oop for out of network, $210/mo contribution). i didn't look at United or Aetna because I've used both insurers in the past and they were bad.  The weird thing is the premiums aren't that much cheaper than continuing my current Kaiser plan ($204.37 vs. $163.99-186.33 biweekly). Also I'd have to find all new providers and that does feel like the hardest part.  Since I don't currently have any prescriptions I take regularly or recurring visions and dental needs that's not much of a consideration.

[sonofsven]

Have you looked into what plans are available to you, and what the deductible and max oop are, as well as the monthly cost? You need real numbers to make a comparison.

There's a bunch available. GEHA ($3300-3600 deductible and 12000-17000 oop, depending on whether in network, $2000 contribution) MHP ($4000 deductible and 12-15 oop, $2400 contribution) and CareFirst BlueChoice (only 6600 deductible and 15000 oop for out of network, $210/mo contribution). i didn't look at United or Aetna because I've used both insurers in the past and they were bad.  The weird thing is the premiums aren't that much cheaper than continuing my current Kaiser plan ($204.37 vs. $163.99-186.33 biweekly). Also I'd have to find all new providers and that does feel like the hardest part.  Since I don't currently have any prescriptions I take regularly or recurring visions and dental needs that's not much of a consideration.

Yes, in my experience, the premiums are not hugely different.  You're really just using it for the HSA benefits.
I didn't even have a PCP for years since I never went to the doctor, but it's a good idea to get one. I've heard it can be difficult to find one, in my case, it wasn't, but I'm not in a city.
If you're healthy with a low spend expectation, they're awesome.