Author Topic: Medical insurance (HSA vs PPO) - how to choose?  (Read 4713 times)

FiguringItOut

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Medical insurance (HSA vs PPO) - how to choose?
« on: July 05, 2015, 12:34:41 PM »
Hope everyone had a good 4th of July!

Please help me to figure this out please.  My new job offers both HSA and PPO medical insurance plans.  I've never had HSA plan before so not very familiar with them.

I'm trying to figure out what option is better for me and my kids, but I keep getting lost in math and various scenarios that I am trying to predict.

I will be eligible for medical starting August 1, 2015.

My two plans are as follows:

                                                                                 HSA                                             PPO
Monthly Contributions (Employee + Children)                  $86                                             $222
Deductible                                                                  $1,500/$3,000                             $500/$1,000
Coinsurance                                                                  20%                                             10%
Out of pocket max                                                          $2,500/$5,000                              $2,000/$4,000
Wellness visits                                                                  Covered 100%                            Covered 100%
PCP                                                                                  Deductible/Coinsurance            $25 copay
Specialist                                                                          Deductible/Coinsurance            $40 copay
Lab/X-Ray/Radiology                                                    Deductible/Coinsurance           Deductible/Coinsurance
Hospitalization                                                                  Deductible/Coinsurance            $250 inpatient, $150 emergency, then deductible/coinsurance
Mental Health                                                                  Deductible/Coinsurance           $25 copay

Looking through last years medical expenses, between myself and my kids  there were few visits to dermatologist, few visits to allergist, I saw my woman's doctor couple times, kids had their annual checkups and had couple additional visits for strep and ear infection.  All in all, not too bad. I expect close to the same in the next 12-16 months.

However, mental health is where it is starting to get confusing.  I've been seeing a therapist for a while and want to continue to do so, but I will need to find a new therapist and thus I don't know how much the sessions are going to be.  Also, one of my kids wants to see a therapist also helping to deal with recent divorce and us moving out of the house and away from their dad.  I definitely think that my kiddo needs a therapist at least for now.  It seems that the break even point on therapy sessions is $130/session.  At this point the PPO copays will equal HSA coinsurance.  But since we just moved, I have no way of knowing how much therapist charge in our new area. Therapy sessions are generally weekly, so I have to plan for this expense separately.

I need to sign up for medical by Monday, July 6th, and so far running numbers hasn't been making much sense.

In addition, the dental monthly contributions are additional $90/month and it's a standard plan with $50 per person deductible, 100% coverage of preventive care, 90% coverage of basic treatment (simple fillings), and 60% coverage of major work.  In the past year, my kids had two fillings done and I've replaced one crown.  I have another crown that has been recommended to be replaced as well and it is out of 5 year waiting period, but it's not bothering me at all, so I will probably wait on it. We all had our dental cleanings done in March on the old medical insurance.

In addition, employer contributes $2000/yr or $167/mo to the HSA. I am not sure how much I can contribute to it myself right now.  Probably not a lot as I'm still trying to get my monthly budget going with the new job and new living arrangements and the recent move. I do plan to contribute at least half of the allowable $6,650 in 2016, but will try to increase it as much as I can, and yes, I know about tax benefits and retirement benefits of HSA account. I should have a good grip on our monthly budget by November/December of this year.  I would not be eligible to contribute to FSA as all as it was used up at the beginning of 2015 on the previous medical plan.

I guess my questions are:
what plan makes more sense for me HSA or PPO for period from August 1 to December 31 2015?
what plan makes more sense for me HSA or PPO for 2016?
What should I do about dental?  Sign up for it for the remaining 5 months of 2015?  Skip 2015 and sign up for it in 2016?  Skip dental altogether (sounds scary - I have a lot of crowns and extensive fillings)?

Also, for the budget of medical expenses, should I max it at family deductible or take it up to the annual out of pocket max ($3,000 vs $5,000)?

MDM

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Re: Medical insurance (HSA vs PPO) - how to choose?
« Reply #1 on: July 05, 2015, 01:34:09 PM »
For medical, if you never see a doctor at all your costs are
   HDHP/HSA = $86/mo insurance - $167/mo employer contribution = -$81/mo (in other words, a negative payment or money coming to you)
   PPO = $222/mo insurance

The difference is $222/mo - -$81/mo = $303/mo in your favor to use the HDHP/HSA option, but this is the "no doctor costs at all" calculation.

To get to reality, you need to include doctor costs.  If you think those will be significantly less than ~$300/mo go with the HDHP; if significantly more than $300/mo go with the PPO.  If close to $300/mo, flip a coin for the rest of 2015 (because you said you won't be contributing your own money to the HSA).

If close to $300/mo and you will be able to contribute the max to an HSA account, then the HDHP/HSA combination comes back on top.

Similar analysis for dental: what would six cleanings (2 each for the 3 of you) plus the crown cost w/o insurance?  Compare that to $90 * 12 = $1080 plus 40% of the crown cost.  It is likely to be close to a wash: compared with medical, dental insurance premiums are somewhat high and benefits somewhat low.


FiguringItOut

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Re: Medical insurance (HSA vs PPO) - how to choose?
« Reply #2 on: July 05, 2015, 06:11:36 PM »
MD,  thank you for laying it out this way.  I've been trying to guess my medical costs on annual basis,bit haven't looked at it as $300 difference per month.  This makes things easier.

Since I have to sign up tomorrow I'm going work the HAHA for the remainder of 2015. Since I'm have deductible to cover on either plan,may ad well pay less premiums for now.  by 2016 oil have a much better idea of what to expect next year and will also know how much I can contribute to HSA account. 

Thank you