PPO or HDHP - Need Help

[cloudsail]

It's open enrollment and our family has experienced some recent changes such that I am re-evaluating our health plan. We are currently on Blue Shield PPO. I've been trying to do the math about switching to a HDHP and it's making my head spin. Would very much appreciate some help.

First, here is a comparison of the plan basics:

Basics	BS-CA PPO 500 CA - Enrolled plan	BS-CA HDHP 2500/2600 CA - Eligible plan
Overview	The plan pays 90% of in-network eligible charges and 70% of out-of-network eligible charges for most covered expenses. You will pay a copay for certain expenses.	The plan pays 90% of in-network eligible charges and 70% of out-of-network eligible charges for most covered expenses. You will pay a copay for certain expenses.
Coinsurance	In-network: Plan pays 90% Out-of-network: Plan pays 70%	In-network: Plan pays 90% Out-of-network: Plan pays 70%
Office copay	In-network: $25 Out-of-network: No copay	No copay in-network or out-of-network
Deductible	There is a combined network deductible. Individual:  $500 Family:  $1,000	In-network: Individual: $2,600 Family: $5,200 Out-of-network: Individual: $2,600 Family: $5,200
Out-of-pocket maximum	In-network: Individual: $3,500 Family: $7,000 Out-of-network: Individual: $6,500 Family: $13,000	There is a combined network out-of-pocket limit. Individual:  $5,000 Family: $10,000

Premiums: PPO = $405/month, HDHP = $5/month

Our family: 4 people, DH and I in our early 30s, two children 5 and 3

Health conditions:
5-year-old is autistic and getting speech therapy, which costs $600/month. This is out-of-network and about $200 is reimbursed by insurance. We pay for the rest out of pre-tax dollars via Healthcare FSA.

This is the only “regular” medical expense for our family, beyond preventive care. Of course with two young children, the occasional office visit is guaranteed to happen (like recently my son got a fungal infection on his big toe :(). My husband also sometimes has minor health problems that he will consult a doctor for.

My concern is that it looks like the in-network and out-of-network deductibles are calculated separately. Will we really save money in the end? The current premiums are paid pre-tax. Or will it depend on whether or not we have significant unforeseen healthcare expenses, like a trip to the ER?

To be honest I'm not even entirely sure how I should go about my calculations. Any help is greatly appreciated.

[cloudsail]

Oh, I should also add that my son sees an ophthalmologist periodically for some vision issues. They are genetic, so we're getting my daughter's vision checked at the end of the month.

My son is covered by Medi-Cal as secondary insurance, which I think currently pays for office co-pays.

[neo von retorch]

The PPO is $4800 more per year. Worst case you max out your in-network deductible and spend $400 more, which you'll have already partially made up with no copays. I think it's a clear winner.

It sounds like "$200/month" is paid by insurance, in which case you'll looking at $2400 towards your (out-of-network) deductible, or $1400 more than the PPO ($1k deductible -> $5200 deductible) so you're still better off by about $3400 by switching to the HDCP.

[cloudsail]

The PPO is $4800 more per year. Worst case you max out your in-network deductible and spend $400 more, which you'll have already partially made up with no copays. I think it's a clear winner.

It sounds like "$200/month" is paid by insurance, in which case you'll looking at $2400 towards your (out-of-network) deductible, or $1400 more than the PPO ($1k deductible -> $5200 deductible) so you're still better off by about $3400 by switching to the HDCP.

Isn't the worst case if I max out the in-network deductible and put the $2400 toward my out-of-network, which comes out to $7600? On the other hand, I'm not sure if the whole amount of what I pay for speech therapy counts toward the deductible or only the amount covered by insurance?

I also don't know how easy it is to max out the in-network deductible. I used to have a HDHP with my previous employer (they contributed almost the entire amount of the deductible), and I recall hitting the deductible pretty quickly. But that was due to my son's ABA therapy, which he doesn't need anymore. How many office visits are we talking about? I expect one unexpected surgery would put us over?

The other thing worth mentioning is we are at 33% for our highest federal tax bracket, and 9.3% for California, so any tax savings are huge.

[TheDude]

I am a little drunk but am I reading that there is 4800 difference in premium for the year? I cant imagine there is any scenario that makes the traditional plan better than the HDHP. I like to make a graph of out of pocket costs vs total costs. I dont generally add copays in to the tradional but just realize if its close the traditional is worse.

I imagine looking at your tax bracket if you can max out the hsa the HDHP is a slam dunk and its not close.