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2014-05-14 11:39 PM

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Subject: Hi Deductible insurance + HSA = what am I missing?

Don't make this about the ACA     But my current plan is being renewed (fiscal year), premium is up over 1500 per year.   Employer has added a hi ded plan this year, with an HSA option.   Seems like (maybe) a no brainer but what am I missing?

Summary

1.  Renew $500 deductible plan, total yearly cost with premium plus out of pocket max (3.5K which includes deductible) is $8372.  Would have an FSA

2.  Switch to $2000 ded plan, total yearly cost (premiums alone are 2700 less than the new 500 plan) plus out of pocket (4K) is 6076.  This is without taking into account that I would put in 2K a year, at least, into the HSA, which rolls over.

Both are 80/20 following deductible for most services

Catch is that dr. visits, imaging, ER visit etc that are currently fixed copays are no longer fixed co-pays but 20% co-insurance, so I lose a little control there and that could add up before the co insurance kicks in....But at the end of the day we could cover either of the max amounts if we had to.

47 YO male, good shape, although I do have a condition that is being treated and have found myself in the ER, admitted to hospital, 3 times in the last 5 years.   But if at happens I hit the max

Seems that if I have a couple years without any major issues, the HSA would almost cover most of any out of pocket.   Seems as if I renew the 500 I am definitely paying $X,000, but hi deductible, I am maybe paying $X,000 minus 2K.. 

Seems like worst case scenario I pay less on the hi ded. plan.  But I am sure it's not that simple.



Edited by ChrisM 2014-05-14 11:42 PM


2014-05-15 7:25 AM
in reply to: ChrisM

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Master
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Beijing
Subject: RE: Hi Deductible insurance + HSA = what am I missing?

Originally posted by ChrisM

Don't make this about the ACA     But my current plan is being renewed (fiscal year), premium is up over 1500 per year.   Employer has added a hi ded plan this year, with an HSA option.   Seems like (maybe) a no brainer but what am I missing?

Summary

1.  Renew $500 deductible plan, total yearly cost with premium plus out of pocket max (3.5K which includes deductible) is $8372.  Would have an FSA

2.  Switch to $2000 ded plan, total yearly cost (premiums alone are 2700 less than the new 500 plan) plus out of pocket (4K) is 6076.  This is without taking into account that I would put in 2K a year, at least, into the HSA, which rolls over.

Both are 80/20 following deductible for most services

Catch is that dr. visits, imaging, ER visit etc that are currently fixed copays are no longer fixed co-pays but 20% co-insurance, so I lose a little control there and that could add up before the co insurance kicks in....But at the end of the day we could cover either of the max amounts if we had to.

47 YO male, good shape, although I do have a condition that is being treated and have found myself in the ER, admitted to hospital, 3 times in the last 5 years.   But if at happens I hit the max

Seems that if I have a couple years without any major issues, the HSA would almost cover most of any out of pocket.   Seems as if I renew the 500 I am definitely paying $X,000, but hi deductible, I am maybe paying $X,000 minus 2K.. 

Seems like worst case scenario I pay less on the hi ded. plan.  But I am sure it's not that simple.

It absolutely *is* that simple.

Go for it, and don't look back.  Most HSA "savings" plans are also investment plans that can grow tax-free.

2014-05-15 8:59 AM
in reply to: ChrisM

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Subject: RE: Hi Deductible insurance + HSA = what am I missing?
I had thought HSAs were made illegal with Obamacare.

But anyways. I switch our company plan to a high deductible with an HSA.

Until the HSA account builds up, it leaves my employees a little exposure if they have a big hospital visit. But my plan covered 100% of medical after the deductible. We are losing that plan at the end of the year for I think an 80/20 co-pay to comply with Obamacare because apparently a plan that covers 100% of expenses and has lower premiums is worse than a plan that covers 80% with higher premiums.

I was sold on going that route because the money in the HSA was my employee's money that would be rolled over to a retirement account if they left. So I could not see a good reason to pay more premiums to an insurance company when that extra could go to the employees.

The other thing I likes is that the plan covered 100% of the standard preventive care recommended for the employee's sex and age.

For me it was a no brainer even with a child with chronic medical problems.

2014-05-15 11:50 AM
in reply to: Jackemy1

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Subject: RE: Hi Deductible insurance + HSA = what am I missing?

Only thing I would investigate for you is whether the deductible includes all visits whether it's at a clinic, ER, staying in the hospital, etc.  I know with Medicare that hospitalization coverage is a totally different set of coverages and deductibles from other types of care.  Since being in the hospital is SO expensive, it's worth verifying.

2014-05-15 3:38 PM
in reply to: ChrisM

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Albuquerque, New Mexico
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Subject: RE: Hi Deductible insurance + HSA = what am I missing?

It can be pretty simple.  I'm attaching a graph from the spreadsheet I put together to analyze the insurance plans offered by my company.  Horizontal axis is the medical expense, vertical axis is total cost to an individual (in this case) on the various plans.  If you'd like the spreadsheet, I can send it via e-mail.  HC80 is a traditional 80/20 insurance plan while the CH80/90 are high-deductible plans.  I haven't included the impact of income taxes on the analysis.  

I've done plots like this for over 20 years (since my first employer offered a cafeteria plan) and they haven't really changed a lot in that time.  There is very little difference in the cost for low expenses (less than $2000/year) or high expenses (over $20,000/year) even though the plans sound like they will be very different.  In effect, the more "comprehensive" health insurance plan functions more like prepaid healthcare.  





Attachments
----------------
insurance1.pdf (17KB - 19 downloads)
2014-05-16 12:01 PM
in reply to: McFuzz

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Subject: RE: Hi Deductible insurance + HSA = what am I missing?
So here is a question. Does the same procedure cost the same on both plans or do the different plans have different negotiated rates?


2014-05-16 1:38 PM
in reply to: otisbrown

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Subject: RE: Hi Deductible insurance + HSA = what am I missing?

Originally posted by otisbrown So here is a question. Does the same procedure cost the same on both plans or do the different plans have different negotiated rates?

In my experience you get the negotiated rates because you're still giving them your insurance card like normal and they process it as insurance.  However, if your deductible for the year hasn't been met your "co-pay" is the full amount owed.

2014-05-16 1:42 PM
in reply to: tuwood

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Subject: RE: Hi Deductible insurance + HSA = what am I missing?

Chris, in my experience the HSA has always been a better plan for our family.  It's a little weird paying everything out of pocket, but when you compare the savings, it generally works out to your benefit.

Depending on your tax bracket and current investments the HSA account can be used as another tax free investment vehicle.  I believe the 2014 family contribution can be up to $6550 for the year tax free.  You can put the money into mutual funds just like an IRA where it grows tax free.

2014-05-16 5:09 PM
in reply to: tuwood

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Subject: RE: Hi Deductible insurance + HSA = what am I missing?

Originally posted by tuwood

Originally posted by otisbrown So here is a question. Does the same procedure cost the same on both plans or do the different plans have different negotiated rates?

In my experience you get the negotiated rates because you're still giving them your insurance card like normal and they process it as insurance.  However, if your deductible for the year hasn't been met your "co-pay" is the full amount owed.

This.  That's what worried me a little.  I know the copay going in, I don't know the usual and customary

Honestly, I took a closer look at my medical history the lat 4-5 years, and went with the lo deductible.  I've had a few things pop up and have hit my max out of pocket a couple times.... and have ongoing meds.  So going the "safe" route.   May be a mistake, but moving on

2014-05-16 5:50 PM
in reply to: ChrisM

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Subject: RE: Hi Deductible insurance + HSA = what am I missing?

Originally posted by ChrisM

Originally posted by tuwood

Originally posted by otisbrown So here is a question. Does the same procedure cost the same on both plans or do the different plans have different negotiated rates?

In my experience you get the negotiated rates because you're still giving them your insurance card like normal and they process it as insurance.  However, if your deductible for the year hasn't been met your "co-pay" is the full amount owed.

This.  That's what worried me a little.  I know the copay going in, I don't know the usual and customary

Honestly, I took a closer look at my medical history the lat 4-5 years, and went with the lo deductible.  I've had a few things pop up and have hit my max out of pocket a couple times.... and have ongoing meds.  So going the "safe" route.   May be a mistake, but moving on

I made the mistake several years ago of just "paying" for stuff with my HSA card and walking away.  I was paying the full price and my insurance wasn't even aware of my spending.  So when I hit several thousand dollars I went to their website and showed that I had paid zero towards my deductible and I called them to find out how I prove what I've been spending.  They informed me that I still have them submit everything to my insurance like normal and they run it through to get the reduced amount and I either pay it there or they send me a bill showing my portion and the insurances portion.  I had a /facepalm moment.

Doing it the proper way now on most of our regular doctor visits, they just run it through insurance like normal and send us a bill at the discounted prices.  We then get full credit towards our deductible.

I have a prescription that normally costs $180/mo. (street price, no insurance) that I get for $120 when I run it through insurance before my deductible is met.  When our family deductible is met, I just give them my insurance card and the pharmacy just charges me $30 (or whatever it is) for the 20% portion because the insurance responds back with what my "copay" is.

It works pretty slick as long as you run everything through the insurance from the start.  If you just pay for stuff without giving your insurance info it's a royal pain because you're sending in forms to get credit and also get stuck with the higher prices.

2014-05-16 5:55 PM
in reply to: 0

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Subject: RE: Hi Deductible insurance + HSA = what am I missing?

Ironically, I learned in this process that the generic med I've been paying a $15 co pay for at CVS for a $27 scrip can be bought without insurance at costco pharmacy (with delivery) for $5......  So there's a hundred twenty a year I am saving at least 



Edited by ChrisM 2014-05-16 5:56 PM


2014-05-19 7:10 AM
in reply to: ChrisM

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Subject: RE: Hi Deductible insurance + HSA = what am I missing?

I've been on a high deductible plan for years - I have built the spreadsheet and modeled the costs.  It does work for me, and I have asthma (which has a slew of pretty pricey maintenance drugs) as well as terrible luck and at least one ER visit or surgery per year.  BUT the math only works because a) my employer loads my HSA for me (so free $1500 towards those drugs every year) and b) my husband has almost zero medical costs.  I like high deductible because it does what insurance is SUPPOSED to do - protect you when things get really bad - you don't get to go to the doc for every stupid little cold because it costs you, but when you end up in the hospital, you will not end up bankrupt.

2014-05-28 10:02 AM
in reply to: mehaner

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Subject: RE: Hi Deductible insurance + HSA = what am I missing?
I made the switch this year....and ended up in the hospital for three nights in early Feb. Previous plan was based on fixed co-pays for a given service. Because of the hospital stay, this year will be about a wash cost-wise. Any year I don't have a major medical event, I should come out ahead and end up with lower costs (on average) over time.

The other change that took place is a little more subtle. Cost of service doesn't really enter into the calculus when you just have a co-pay. Now that I have a little skin in the game for individual tests and procedures, I apply a lot more attention to costs and push back a lot more on some of the testing / recommendations.
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