Author Topic: Planning for pregnancy/child - HMO vs HDHP/PPO HSA?  (Read 14890 times)

jeromedawg

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Planning for pregnancy/child - HMO vs HDHP/PPO HSA?
« on: March 02, 2016, 02:30:41 PM »
Hey guys,

So my wife and I have been discussing this and I'm wondering if a lot of people take into consideration whether they're on an HMO vs HSA-based medical plan when planning for kids.

We just had our first back in August so I don't want to get too ahead of myself...but anyway, because I wanted to start up an HSA (and because it was the lowest-cost plan), I signed up for the one with BCBS through new company. Once I started looking into what's actually covered though, it doesn't seem like the *best* thing if we are expecting a lot of doctor visits, etc. I think if we were to get pregnant under the current plan, things could get really expensive compared to the HMO. Our annual cost is around $2500 (total of all costs per pay period) and there's a $5700 deductible (for employee + spouse + kids) that needs to be met prior to coinsurance kicking in (there are pretty much no copays). We're sorta learning the hard way with my son's plagio/brachycephaly condition where we are now considering getting him a helmet.

The upside of the HSA of course, is that we get $1600 from the company upon completing health & wellness activities (e.g. health assessments, health coaching, etc)

I was looking at the HMO option, which is with Kaiser, and the annual deductible is $600. Annual cost of the plan ends up around $4290 or so.

They have an example of what the cost of birth might be but I *think* they're only factoring in the cost of giving birth as a single-covered person which has much lower deductibles. Anyway, from what I saw, the HMO was about $500 less than the HSA... is this generally the case where HMO will end up costing you less out of pocket than HSA (presumably because of the lower deductible)?

Would it make sense, if we wanted to maximize, to try to time getting pregnant (I know this isn't practically as easy as said given how it didn't happen right away with getting pregnant for our first kid)? So for example, if open enrollment is in November and new benefits kick in in Jan 2017, we can try to time pregnancy with a delivery date of Jan/Feb 2017, then change to HMO during open enrollment and switch back to the HSA-based plan upon declaring a life event? I suppose it also depends on the risk we want to take upon declaring the life event (e.g. if we expect that our baby will not have any sort of issues requiring additional doctor visits that normally wouldn't be covered under an HSA-based plan).

Any ideas or strategery from those of you out there who are parents and have considered doing or have done things like this?

historienne

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Re: Planning for pregnancy/child - HMO vs HDHP/PPO HSA?
« Reply #1 on: March 02, 2016, 03:07:48 PM »
Birth is expensive - whatever your deductible is, you will hit it, even for an uncomplicated vaginal birth.  Standard prenatal care should be free on either plan.

In terms of timing, I wouldn't try to cut things too close; babies do come early sometimes.  When our kid was born in September, we decided to stick with the HMO style plan for the rest of the year because we didn't know if she'd have any issues.  As it turns out, that was a good choice - she had GERD (not at all uncommon) and we would have reached the deductible pretty quickly in the HDHP plan just for specialist visits.

little_brown_dog

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Re: Planning for pregnancy/child - HMO vs HDHP/PPO HSA?
« Reply #2 on: March 02, 2016, 03:22:39 PM »
Considered something similar but went with the more expensive and comprehensive plan for my pregnancy and birth of our daughter. She ended up having feeding issues and required hospitalization after her birth, and a few extra follow up visits. In that respect, going with the better plan was the much better option. We plan on just biting the bullet and spending the extra money for the better insurance throughout the pregnancy/infancy years. Healthcare is one of those expenses that doesn't bother me too much since I like the comfort of knowing I'll have great coverage even if I'm spending more per month. Instead we just find other areas of the budget to trim.

slappy

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Re: Planning for pregnancy/child - HMO vs HDHP/PPO HSA?
« Reply #3 on: March 02, 2016, 03:31:05 PM »
I have a HDHP and I am due in September. My understanding is that once we reach the deductible ($4000), in network care is covered at 100%.  If that is the case, then we come out at least $1000 ahead of paying for the other plan, since we have weekly therapy sessions for my husband. I'm afraid that I am misunderstanding the plan, and will end up screwed, so I will be following to see what others think. (I have contacted the insurance company but they appear to be frustratingly incompetent.)

seattlecyclone

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Re: Planning for pregnancy/child - HMO vs HDHP/PPO HSA?
« Reply #4 on: March 02, 2016, 06:06:34 PM »
See http://forum.mrmoneymustache.com/mini-money-mustaches/infant-medical-expenses-and-open-enrollment/ for a thread I started about this basic topic. I'll post an update to that thread when all the billing is eventually sorted out between the hospital and insurance. We stuck with HDHP coverage, which I think was the right call for us, but we have lower deductibles/out of pocket maximums than your plan. It's been over two months since our son was born and there's still a couple of pending claims.

jeromedawg

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Re: Planning for pregnancy/child - HMO vs HDHP/PPO HSA?
« Reply #5 on: March 02, 2016, 07:32:16 PM »
Thanks all!

The biggest thing right now has been us finding out he has plagio/brachycephaly and now are considering getting him into a helmet to correct it. Since our deductible is $5700 and the cost of the helmet may range from $2000-$3000, it really looks like we're going to have to pay out of pocket. The only other option was Kaiser which would have been about $70~ more per pay period with a $600 deductible. I did the math though and if we're just talking about the helmet and nothing else, the difference in what we'd be spending is very little. I probably should have just gone with HMO but that would have resulted in a huge change since we've never been with Kaiser... I didn't realize all these gotchas until these issues with our son came up. I guess this is all just part of the whole "kids are frickin expensive" saying :T

La Bibliotecaria Feroz

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Re: Planning for pregnancy/child - HMO vs HDHP/PPO HSA?
« Reply #6 on: March 03, 2016, 01:20:03 PM »
...we can try to time pregnancy with a delivery date of Jan/Feb 2017, then change to HMO during open enrollment and switch back to the HSA-based plan upon declaring a life event? I suppose it also depends on the risk we want to take upon declaring the life event (e.g. if we expect that our baby will not have any sort of issues requiring additional doctor visits that normally wouldn't be covered under an HSA-based plan).

Any ideas or strategery from those of you out there who are parents and have considered doing or have done things like this?

Bad idea! Because you know what's REALLY expensive? When your January baby arrives on Halloween instead. The NICU is sooo no cheap. And you can easily run up bills from pregnancy complications. I had a "no big deal" issue that cost me a thousand dollars at the ER--at six weeks along.

So my advice, if you're going to switch plans and time things, is to do so earlier in pregnancy. We did this both times. Mr. FP started a new job when I was pregnant with Big Brother; we downgraded plans after delivery. Little Brother was an accident, but we happened to find out he was en route during open enrollment.

Incidentally: It took us a year and a half of charts and Robitussin to make Big Brother. Little Brother? Single incident of carelessness. They are 16 months apart. (FWIW I think having them so close has more advantages than disadvantages on balance, but YMMV.)


mm1970

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Re: Planning for pregnancy/child - HMO vs HDHP/PPO HSA?
« Reply #7 on: March 03, 2016, 01:28:03 PM »
...we can try to time pregnancy with a delivery date of Jan/Feb 2017, then change to HMO during open enrollment and switch back to the HSA-based plan upon declaring a life event? I suppose it also depends on the risk we want to take upon declaring the life event (e.g. if we expect that our baby will not have any sort of issues requiring additional doctor visits that normally wouldn't be covered under an HSA-based plan).

Any ideas or strategery from those of you out there who are parents and have considered doing or have done things like this?

Bad idea! Because you know what's REALLY expensive? When your January baby arrives on Halloween instead. The NICU is sooo no cheap. And you can easily run up bills from pregnancy complications. I had a "no big deal" issue that cost me a thousand dollars at the ER--at six weeks along.

So my advice, if you're going to switch plans and time things, is to do so earlier in pregnancy. We did this both times. Mr. FP started a new job when I was pregnant with Big Brother; we downgraded plans after delivery. Little Brother was an accident, but we happened to find out he was en route during open enrollment.

Incidentally: It took us a year and a half of charts and Robitussin to make Big Brother. Little Brother? Single incident of carelessness. They are 16 months apart. (FWIW I think having them so close has more advantages than disadvantages on balance, but YMMV.)

Yes, I would try to work through your total costs for "a pregnancy" comparing the two options, and go from there. 

Example: I went with HMO.  $20 copay for doctor's appts (there are a lot of them during the pregnancy) but everything else is covered.  Deductible was...I want to say $350 per person the first time around (this is important too -the baby is its own person).

The monthly cost for the HMO was not high though - so the total cost of HMO premiums + copays + deductible was lower than the HDHP deductible (for me).  (Note, this was also made more complicated by the fact that with kid #2 I had double coverage because my husband has an HDHP also).

In any event:
2006 - vaginal birth, full term, 2 days in hospital, epidural = $8500 (half for doc, half for hospital) (not including the copays)
2012 - vaginal birth, no epidural (oh shoot, catch!), one night in hospital (went home early so I could sleep!) - $14,000

You will hit the max either way with a birth.

I still have the HMO.  My second child required a $20k surgery when he was 9 months old, and the copay was $125 for the hospital and a bit more for the doc.