Should I go with HSA or tradition health care (1 Viewer)

This was discussed some in the other thread, but I didn't want to hijack that one any more.  I am starting a new job and my health care will kick in August 1st.  I have a choice between the HSA and the traditional plans (the actual care and providers are the exact same for both plans.  Only difference is pay structure).  Since there are so many differences among plans I will try and include as much info about each plan as possible, along with things I know we will spend for health care.  I would love to post a snapshot of the grid I have, but I have no idea how to post it on here. 

These are the nuts and bolts of the HSA:

Monthly premium $300, deductible $3,000, Max out of pocket $5,000, Both medical and prescription expenses apply, my company contributes $1,000 per year to the HSA, preventative care is covered at 100%, everything else is 10% after the deductible is met.

These are the nuts and bolts of the traditional:

Monty premium $500, deductible $1,200, max out of pocket $4,400, only medical expenses apply as there is a separate max ($5,000) for prescription costs, preventative care is covered 100%, copays for office visits are 25, specialist 50, urgent care 40, emergency room 250, most everything else is 15% after deductible. 

For our family there will be roughly 30 (yes 30) specialist appointments per year and about 10 ongoing prescriptions.  I am not able to provide the actual cost of each specialist appointment or the cost of the meds.  There is potential for a hospital admission that could pop up either several times or never again, impossible to say and I am not going too get into details of it. 

For the HSA the cost of yearly premiums plus the deductible is about $6,600.  For the traditional the yearly premiums plus deductible are about $7,200.  I can guarantee you we will meet and exceed the deductible no matter which plan we pick.

For the HSA the max contribution is $5,750 plus the $1,000 that the company will contribute. 

Now the question is, knowing how many specialist visits there will be with potential for a hospital admission, which is better?  It seems like even though the out of pocket max is $600 higher for the HSA, that would be offset by the $1,000 the contribute to the HSA account. 

Also, a question about the max out of pocket.  Once you hit the max, do you have any costs at all for necessary treatments?

Say we hit the max in October, and one of us has to go to the ER in December.  So we pay any percentage or copay or anything for that?  Or is that max actually the "max".  Just want to make sure they are screwin me

Just doing some math for the HSA deductible looking at the specialist visits alone, assuming around $150 per visit, we would the deductible after about 20 visits (actually sooner after adding costs of meds and other stuff that may pop up).  Let's say after 15 visits we would hit the $3,000 deductible.  So that means for the next 15 visits we would pay 10%, so about $15 per visits, $225 total for the remainder of the year. 

Even with all the specialist visits and higher max out of pocket for the HSA, it seems the HSA might be the way to go for us.  I think that $1,000 the company contributes just might be what puts it over the top. I need to make sure they contribute $1,000 every year though.  I am under the impression they do but who knows. 

There has got to be things I am missing or just don't know about.  I am hoping some of you fine gents can lead me down the right path here

I haven't read through the entire thing but generally speaking...

if you're young and healthy, HSA. Statistically speaking you'll just be storing cash agressively which you can invest. It's pre-taxed income as well.  Also, I can pretty much guarantee everyone will be on an HSA in the future. The traditional insurance copay structure is too expensive for companies to handle and a majority have already shifted into consumer driven health options. 

Take your very specific questions to your HR department. There will be exclusions on specialists and other items that you're probably not aware of and you need to know those things before you decide. 

I have had the same decision at work the past 2 years.  So far I have not chosen the high deductible plan that allows the HSA and gone with the traditional plan with a FSA that allows me to contribute $2,500 a year.  I have a family of 4 and while I hardly go to the doctor it seems like my wife and kids are always going.  The FSA is good for now but I may consider the HSA next year.

bigmarc27 said:

I haven't read through the entire thing but generally speaking...

if you're young and healthy, HSA.

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I have read this also.

However with this exact scenario, the extra $1,800 deductible for the HSA is erased and then some by the $2,400 less per year I would pay for the premiums.

Also, the $600 higher out of pocket max is more than cancelled out by the $1,000 my employer will contribute to the HSA (again, I need to find out if that is ever year and not jut a one thing).

It SEEMS HSA is a no brainer for us given the specifics of both plans for not just our situation but basically any situation, but again, I really could be missing some significant info.

As for the specialists, I know for a fact they would be approved specialist visits.

Insurance, to me, is to save myself and family from a catastrophic event.  I can't afford a huge catastrophe (way more than insurance will pay), so even if I pay more out of pocket (which I can afford) I feel better than being on the hook for me mortgaging my home to pay for bills.

I have the HSA High deductible deal because its the only thing offered at work. Im not spring chicken, but I dont go to the doctor at all so its not too bad... my wife uses the HSA to pay for her care.

I had traditional insurance back in the 90s when my first wife had cancer (RIP) and it saved us from certain financial ruin. Pretty sure we'd be screwed now with the coverage we have. Just roll with what you can afford. You dont want to plan on a catastrophe.

HSA easily.  If you are going to hit the deductible regardless, then take the free money they are giving you.  The only reason not to do it is if you are very healthy AND the high deductible would be difficult for you financially if you had to pay out of pocket. 

BowieMercs said:

I have the HSA High deductible deal because its the only thing offered at work. Im not spring chicken, but I dont go to the doctor at all so its not too bad... my wife uses the HSA to pay for her care.

I had traditional insurance back in the 90s when my first wife had cancer (RIP) and it saved us from certain financial ruin. Pretty sure we'd be screwed now with the coverage we have. Just roll with what you can afford. You dont want to plan on a catastrophe.

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Quick word of advice for you or anyone in here really...

if you can afford to pay your healthcare expenses OOP and leave the HSA untouched and just add money, you should do so. Think of the HSA as your heakthcare 401k for retirement.  Your health expenses are likely to be later in life anyway, you don't want to nickel and dime that account now, it needs to grow.  Tell your wife to start using your cash accounts for her doc visits and scripts.

Source: worked in healthcare my entire career. 

bigmarc27 said:

Quick word of advice for you or anyone in here really...

if you can afford to pay your healthcare expenses OOP and leave the HSA untouched and just add money, you should do so. Think of the HSA as your heakthcare 401k for retirement.  Your health expenses are likely to be later in life anyway, you don't want to nickel and dime that account now, it needs to grow.  Tell your wife to start using your cash accounts for her doc visits and scripts.

Source: worked in healthcare my entire career. 

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Im a below avg FBG, so we can't afford that option.

HSA option offered the last 3 years or so at work and have a feeling they will continue to push hard. Not for me. Too much risk.

cap'n grunge said:

HSA option offered the last 3 years or so at work and have a feeling they will continue to push hard. Not for me. Too much risk.

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The fact that it's still optional and not mandatory puts your company in increasingly rare company.  

cap'n grunge said:

HSA option offered the last 3 years or so at work and have a feeling they will continue to push hard. Not for me. Too much risk.

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Too much risk of what?  Do your companys HSA not have a max out of pocket or something?

xulf said:

Insurance, to me, is to save myself and family from a catastrophic event.  I can't afford a huge catastrophe (way more than insurance will pay), so even if I pay more out of pocket (which I can afford) I feel better than being on the hook for me mortgaging my home to pay for bills.

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Not understanding what you mean.  

With the deductible and out of pocket, are there individual and family maxes? You will want to understand exactly what does/does not apply to these accumulators including in/out of network, etc.

Also money you put into your hsa is tax free so that would weigh into the equation from a savngs perspective.

HSA rolls over so thats a bonus whereas fsa doesnt...use it or lose it.

Also does your work fund your HSA in a lump sum fashion or per paycheck?  If its per paycheck, that means you'll have more true out of pocket costs right away so will need to consider that.  

Almost feel like it would make sense to consider traditional coverage through the end of this year and then when you get to open enrollment, reassess (assuming you have open enrollment November-December).

 I had a HSA and my family blew through the funds in the first two months of the year a few years ago.  We didn't have enough to cover the family deductible in our HSA so it got to be a hassle with all of the bills for the rest of the year.  We switched to traditional and I pay a little bit more (sans tax break for hsa contributions) but there is less hassle.

HSA is less out of pocket for premiums but there is risk if money is tight and you don't have enough HSA to cover all of your out of pocket costs nefore you get to your true health insurance coverage.

bigmarc27 said:

The fact that it's still optional and not mandatory puts your company in increasingly rare company.  

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Well, i do work for a large healthcare system. We should all have 100% free coverage damnit.

I am leaning towards going with the traditional when i sign up for the rest of this year and learn as much as I can about the HSA before the next open enrollment which I think is in November.  

I have no idea what the rules are when entering an HSA mid-year.

HSA is a powerful tool. As mentioned above, it rolls over from year to year. Your employer gives you free money. You can also invest it, tax-free, above a certain balance. So really it's a triple tax advantage... 1. Whatever you deposit is before taxes, 2. Disbursements are not taxed, 3. Investments grow tax free.

I had an HSA for over a decade and loved it. Don't have one available at my current employer, but have been lobbying HR to get one for us.