Author Topic: Why HSA?  (Read 5238 times)

AdrianC

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Why HSA?
« on: November 12, 2016, 08:14:07 AM »
Shopping on the healthcare exchange for our first, and likely last, Obamacare insurance. We are fortunate to have a wide choice of plans, some HSA, some not. The HSA plans cost slightly more than a similar non-HSA plan. Does that make sense? The non-HSA has lower copays, same deductibles. We use very little healthcare service usually. Well checks and flu shots is usually all we do.

So why use an HSA? Is the tax deduction the only real benefit?

slugsworth

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Re: Why HSA?
« Reply #1 on: November 12, 2016, 02:34:00 PM »
Others may have more info, but this might be a useful link. I'm surprised that the deductibles are the same.

http://www.madfientist.com/ultimate-retirement-account/

DavidAnnArbor

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Re: Why HSA?
« Reply #2 on: November 12, 2016, 08:43:43 PM »
I noticed the same exact paradox, that the HSA plans were more expensive then similar plans that seemed to shell out a little more money for medical claims.

Spork

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Re: Why HSA?
« Reply #3 on: November 13, 2016, 10:22:49 AM »
I have no real idea why an HSA compatible plan is higher... but as to why...

* First off, it lowers your MAGI.  If you're fishing for subsidies, lowering your MAGI by $6750 may have significant consequences.
* Secondly, this is kind of a cool retirement vehicle.  It's almost a Roth.  If you drop the maximum into it every year and track your medical expenses BUT do not withdraw your expenses, then your "expenses" will stay invested and compound over time.  At some point in the future, you can withdraw the tracked expenses tax free. 

Evgenia

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Re: Why HSA?
« Reply #4 on: November 17, 2016, 05:15:29 PM »
Huh. In our case, the HSA plan was not higher, but then, each state implemented the ACA so very, very differently, I will probably never understand those differences.

I love our HSA. For our high-deductible plan, it's turned out to be more useful than I ever expected. We can pay for everything from co-pays to sunscreen to a lot of other drugstore stuff, to dental visits and glasses (for which we do not have coverage). And, as others have mentioned, if you don't use it, it just acts as a savings account and accrues until you withdraw later, tax free.

MustacheAndaHalf

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Re: Why HSA?
« Reply #5 on: November 20, 2016, 07:39:47 PM »
If you haven't spent your HSA by age 65, you can make withdrawals for non-medical reasons and pay taxes on the withdrawal.  Medical expenses before and after age 65 are still paid with pre-tax dollars (which is why it's worth saving those receipts).

AdrianC

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Re: Why HSA?
« Reply #6 on: November 21, 2016, 06:37:22 AM »
Comparing two similar plans:

Anthem Blue Cross and Blue Shield Anthem Bronze Pathway X HMO 0 for HSA
Deductible $13,100
Out-of-pocket maximum $13,100
$1257/mo

Anthem Blue Cross and Blue Shield Anthem Bronze Pathway X HMO 5200
Deductible $10,400
Out-of-pocket maximum $14,300
$1248/mo

Deductible is higher for HSA, but out of pocket maximum is lower. Negligible difference in premium cost.

The HSA option is looking attractive. Getting that MAGI down a bit might save us a whole lot.

With an HSA, what do you pay for a normal primary doctor visit? With the non-HSA it's a $35 copay.

DavidAnnArbor

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Re: Why HSA?
« Reply #7 on: November 21, 2016, 08:23:46 AM »
Unless it's the free yearly physical I imagine you pay the entire cost of that visit until you reach your deductible. If you go to the in-network provider then at least your cost for that visit would be less.

AdrianC

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Re: Why HSA?
« Reply #8 on: November 23, 2016, 08:52:57 AM »
Unless it's the free yearly physical I imagine you pay the entire cost of that visit until you reach your deductible. If you go to the in-network provider then at least your cost for that visit would be less.

Sure.

What are you folks with HSAs paying for primary care doctor visits?

SomedayStache

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Re: Why HSA?
« Reply #9 on: November 23, 2016, 08:59:01 AM »
My kiddos pediatrician is $65-$75 for sick child visits.

A visit to my doctor (well nurse actually because I couldn't get in to see the doctor) for a hurt foot was $70.

My husband saw his PCP when he was sick and it was only $45!

I was pleasantly surprised because these costs are not THAT much more than our old co-pays and I expected the payment in full to be far higher. 

This means absolutely nothing for your situation though because medical costs vary dramatically from place to place.

Cromacster

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Re: Why HSA?
« Reply #10 on: November 23, 2016, 09:02:33 AM »
Unless it's the free yearly physical I imagine you pay the entire cost of that visit until you reach your deductible. If you go to the in-network provider then at least your cost for that visit would be less.

Sure.

What are you folks with HSAs paying for primary care doctor visits?

I'm not on an ACA plan, but my HSA plan through my employer I get 2 preventative visits per year for free.  I'd have to dig into what this covered, but it includes an annual physical.

Much Fishing to Do

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Re: Why HSA?
« Reply #11 on: November 26, 2016, 06:47:56 AM »
Unless it's the free yearly physical I imagine you pay the entire cost of that visit until you reach your deductible. If you go to the in-network provider then at least your cost for that visit would be less.
Yes, thats an important point.  The "entire cost" you end up paying is at least the insurance cos negotiated rate, which is usually much much less.  Many people talk about very high deducible plans being something that serves them in the case of disastrous bills only, but as long as you use in network providers the value goes way beyond that.  I had an insurance plan one year that, though it paid basically nothing, turned $8k of bills into $2k b/c I'm paying their negotiated rate, not the stick it to you sticker price.

Spork

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Re: Why HSA?
« Reply #12 on: November 26, 2016, 11:08:47 AM »
Unless it's the free yearly physical I imagine you pay the entire cost of that visit until you reach your deductible. If you go to the in-network provider then at least your cost for that visit would be less.
Yes, thats an important point.  The "entire cost" you end up paying is at least the insurance cos negotiated rate, which is usually much much less.  Many people talk about very high deducible plans being something that serves them in the case of disastrous bills only, but as long as you use in network providers the value goes way beyond that.  I had an insurance plan one year that, though it paid basically nothing, turned $8k of bills into $2k b/c I'm paying their negotiated rate, not the stick it to you sticker price.

This is absolutely true... and oddly paying for the visit without filing at all ALSO gives you the great discount.  It seems the non-discount is the write-off amount for some expected number of "I'm not going to pay this ever" folks.

AdrianC

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Re: Why HSA?
« Reply #13 on: November 29, 2016, 10:07:22 AM »
Yes, thats an important point.  The "entire cost" you end up paying is at least the insurance cos negotiated rate, which is usually much much less.  Many people talk about very high deducible plans being something that serves them in the case of disastrous bills only, but as long as you use in network providers the value goes way beyond that.  I had an insurance plan one year that, though it paid basically nothing, turned $8k of bills into $2k b/c I'm paying their negotiated rate, not the stick it to you sticker price.

That's good to know. Our plan last year had dental, which actually covered us for checkups only, but it did get us the negotiated rate at the dentist. That helped a lot.

This year for dental we bought a discount card with Cigna.

Now, what constitutes an HSA Compatible Plan? Does it have to say "HSA" in the plan name? I thought so, then I read this:

http://news.morningstar.com/articlenet/article.aspx?id=782042

"The parameters for high-deductible healthcare plans and health savings accounts are generally remaining the same for 2017. For 2017, a high-deductible plan is defined as one with at least a $1,300 deductible for individuals and a $2,600 deductible for families; the maximum out-of-pocket expenses that covered people can incur are $6,550 for individuals and $13,100 for families. "

Any Bronze plan meets that.

Spork

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Re: Why HSA?
« Reply #14 on: November 29, 2016, 10:25:26 AM »
Yes, thats an important point.  The "entire cost" you end up paying is at least the insurance cos negotiated rate, which is usually much much less.  Many people talk about very high deducible plans being something that serves them in the case of disastrous bills only, but as long as you use in network providers the value goes way beyond that.  I had an insurance plan one year that, though it paid basically nothing, turned $8k of bills into $2k b/c I'm paying their negotiated rate, not the stick it to you sticker price.

That's good to know. Our plan last year had dental, which actually covered us for checkups only, but it did get us the negotiated rate at the dentist. That helped a lot.

This year for dental we bought a discount card with Cigna.

Now, what constitutes an HSA Compatible Plan? Does it have to say "HSA" in the plan name? I thought so, then I read this:

http://news.morningstar.com/articlenet/article.aspx?id=782042

"The parameters for high-deductible healthcare plans and health savings accounts are generally remaining the same for 2017. For 2017, a high-deductible plan is defined as one with at least a $1,300 deductible for individuals and a $2,600 deductible for families; the maximum out-of-pocket expenses that covered people can incur are $6,550 for individuals and $13,100 for families. "

Any Bronze plan meets that.

Not all of them do.  The one I signed up for had Max OOP > $13,100.

I'm not sure why... It was only off by a couple hundred bucks, so it almost seems like they engineered it to "miss" HSA compatibility.  Maybe there is some overhead pain-in-the-ass for them...  but it seems odd.   This particular plan was cheap enough that even accounting for NOT being allowed the $6750 AGI deduction and getting less of a subsidy: it was still the best deal.  It also had a better network of doctors in my immediate area.  Go figure.

AdrianC

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Re: Why HSA?
« Reply #15 on: November 29, 2016, 11:32:59 AM »
Not all of them do.  The one I signed up for had Max OOP > $13,100.

I'm not sure why... It was only off by a couple hundred bucks, so it almost seems like they engineered it to "miss" HSA compatibility.  Maybe there is some overhead pain-in-the-ass for them...  but it seems odd.   This particular plan was cheap enough that even accounting for NOT being allowed the $6750 AGI deduction and getting less of a subsidy: it was still the best deal.  It also had a better network of doctors in my immediate area.  Go figure.

Interesting. There must be some other criteria, also though. I just looked on Healthcare.gov and found a non-HSA Silver plan with Max OOP of $12,800 and deductible of $6,600.

The overhead pain-in-the-ass is all I can figure too. A family member works for one of the big health insurers, and he didn't know why an HSA would cost more. Market pricing...

Looks like we are going with a non-HSA Silver plan through a local non-profit insurer. Has our doctors (for now - who knows come January). Premium is less than we are paying now for a Bronze plan with Aetna, who are dropping us.