Which Healthcare Plan to Choose: Worth Paying More Out of Pocket for HSA?

[quarterlifecrisis94]

I just started a new job.  There are 3 options with the lowest premium and highest deductible being the cheapest at $39 per paycheck.  Typically I would choose this plan especially with an HSA but unfortunately I have a melanoma that I need to get removed by a surgical oncologist.  I am not sure how much that will cost.

The high deductible plan has an in-network deductible of $4,000 and an OOP max of $6,350.  I believe it is a PPO.  The, better, $94 plan a paycheck has a in-network $3,000 deductible and an in network OOP max of $6,500.  That plan also has a $100 copay for specialist visits.  I called the Healthcare provider and they confirmed that an oncologist is a specialist but I feel like she didn't explain the copay correctly.  It means that I would pay $100 max for any specialist visit regardless of the work the care they provide right?

The top plan, which is $123, has the same Copays but the in-network deductible is $1,500 (OOP Max is also $6,500).  All of them have 20% coinsurance.  Not knowing the cost of this surgery, which one would you choose?

[kanga1622]

I can't advise you specifically on which one to choose but generally you will need to pay your $100 specialist copay plus whatever else is the bill until you hit your deductible. Essentially if your overall bill is less than the deductible then you pay the full amount. Once you hit your deductible you still pay your copay plus the 20% coinsurance until you hit your OOP max.

[Scandium]

In general, if you need surgery, sign up for the plan with the lower deductible this year, get the surgery, then switch to the HSA plan next year (and don't use it). I've done this with dental; get it one year and did some fillings, then skip it for other years.
Although that is a very low deductible difference between the two plans, only $1000? For mine the HSA plan is double. Then you almost might as well consider paying the extra out of pocked and max out HSA. Then you also get more you can take out tax free later.

[kite]

With what I know (both from what you shared, from a loved one who had Melanoma and my own health journey the last 12 months), in your shoes, I’d plan to hit the OOP max for next few years.
Given that, it’s better to run the $6500 thru an HSA, which can only be done with the HDHP.

Get the best doctor & oncologist you can. Wishing you the best.

[cannotWAIT]

Yeah, I would advise you to prioritize whichever one gives you the best network. You don't want to fuck around with melanoma. And if they're both the same, then go for the lowest OOP max.

[terran]

I wouldn't count on a procedure being covered by a specialist copay, only office visits (like whatever consultation they do before they schedule the procedure).

[seattlecyclone]

I wouldn't count on a procedure being covered by a specialist copay, only office visits (like whatever consultation they do before they schedule the procedure).

This. You'll be billed for a "visit" when you go and talk to them and they maybe take a look at your body. If they actually do anything, that will almost certainly be billed separately as a procedure. The procedure will likely be one of the things that brings the deductible/coinsurance formulas into play, rather than having a fixed copay, but that will be something you'd need to read the fine print on your plan documentation to get a better idea about.

The HSA plans on the other hand tend to be more standardized so we can pretty confidently say that you'll pay the full cost of this whole thing out of pocket until you hit your deductible, and then 20% afterward.

How to think about the choice here:
First off, it's important to recognize the difference between pre-tax dollars and post-tax dollars. Your premiums will generally be pre-tax dollars, and so will any money you have withheld for HSA or FSA. HSAs are great compared to FSAs because you lose FSA money you don't use by the end of the year, giving you an incentive to err on the side of under-contributing, whereas you can just blindly max out the HSA knowing you can use the money later if it's not needed this year. Do you even have access to an FSA?

All other out-of-pocket costs will generally be post-tax dollars. You'll need to scale these post-tax expenditures up by your marginal tax rate (including 7.65% payroll tax at most income levels) to get an apples-to-apples comparison.

Your HSA plan costs $39 * 26 paychecks (assuming biweekly pay schedule) = $1,014 before you have any actual medical bills. These are pre-tax dollars. Then you pay 100% of the first $4,000, and 20% of the next expenses until you hit your $6,350 max. If you're a single person maxing out your HSA the first $4,150 of these expenses can be pre-tax. Total medical bills of $15,750 or higher will cause you to pay the out-of-pocket max.

Premium for the medium plan is $94 * 26 = $2,444 pre-tax, and premium for the top plan is $123 * 26 = $3,198 pre-tax.

Seems like the medium plan should be a non-starter. If you have no medical expenses the medium plan costs $1,430 more in premiums. If you have $1 million in medical expenses the medium plan costs $1,430 more in premiums and $150 more in out-of-pocket costs. There isn't a place in between where the lines cross either. Same with the highest-priced plan. There are some amounts of medical bills where it would cost less than the medium plan, but it's not straightforward to think of a scenario where it would cost less than the HSA plan after you factor in the difference in premiums, and especially not after you factor in the tax savings from HSA contributions.

Now, this all assumes the network of physicians is the same between all of these plans. If the doctor you need is in-network for one of the plans but not the others, that can easily override all of the above considerations.

[sonofsven]

I would go for the lowest max OOP if it's obvious your costs will be much higher, but they are all nearly identical.

So in that case I would go with the HSA plan if you are planning on contributing the max to the HSA account and investing it and cash flowing the medical procedures out of savings.
If you don't do that then I don't see any reason to take a HSA plan, except it is the cheapest monthly option.

I would check the networks and try to get an idea of where, and especially when, you can get in for the procedure. And try to get a cost estimate, but it seems like you're going to be paying out your max OOP regardless.

I made the mistake of sticking with my same insurance provider, not knowing that a lack of anesthesiologists in their network would delay my upcoming surgery by 4 months, on top of the six months it took from first asking my doctor for a referral to  getting a call from the scheduler for the surgery.

In my case it was an easy decision to put my HSA plan on hold for a year because I can get a Silver plan with a $2k max OOP vs my HSA with a $7k max OOP.