Is HSA preferrable over regular health insurance plans?

[Anonymous]

I was looking at the "HSA Millionaire" thread and am very confused. Do people genuinely like HSAs better than just your run of the mill regular health insurance?

My employer offers regular health insurance for my family of 5 in which I pay $450 a month for health insurance, dental insurance and vision insurance, my employer pays the difference. My health insurance has a $600 deductible for my family. The HSA offered with expanded dental for $88 a month with a $3500 deductible for a family.

Would it make more sense for me to change to an HSA?

[Anonymous]

It’s preferable for us. We don’t have any chronic health conditions or issues and are able to absorb any emergency issues that come up.

We can always switch back to regular health insurance if or when we need it, but have been on a high deductible plan for years and are using it as an additional retirement account. This is especially handy given that we are a single income household.

It may not be best for you or your family, but probably worth running the numbers.

[Anonymous]

Op here - we initially didn’t do it because I was pregnant a lot the past 9 years (6 pregnancies and 3 living children). But we are done having kids now and am wondering if it makes sense.

However things like kids surgeries (tonsil and broken arm) have come up 3 times in the past 4 years. I guess we could just pay till we hit the deductible and then 80% would be covered by insurance? We also have things like food allergies, kidney problem (hopefully resolved for one kid), and just regular visits for 5 people every year.

[Anonymous]

Anonymous wrote:Op here - we initially didn’t do it because I was pregnant a lot the past 9 years (6 pregnancies and 3 living children). But we are done having kids now and am wondering if it makes sense.

However things like kids surgeries (tonsil and broken arm) have come up 3 times in the past 4 years. I guess we could just pay till we hit the deductible and then 80% would be covered by insurance? We also have things like food allergies, kidney problem (hopefully resolved for one kid), and just regular visits for 5 people every year.

Your family really doesn't sound like a candidate for an HSA.

We have two high option insurances and financially it has worked out very well for us because of a number of long hospital stays. This is to the point where I feel sorry for the insurance company that is generally primary.

[Anonymous]

Anonymous wrote:I was looking at the "HSA Millionaire" thread and am very confused. Do people genuinely like HSAs better than just your run of the mill regular health insurance?

My employer offers regular health insurance for my family of 5 in which I pay $450 a month for health insurance, dental insurance and vision insurance, my employer pays the difference. My health insurance has a $600 deductible for my family. The HSA offered with expanded dental for $88 a month with a $3500 deductible for a family.

Would it make more sense for me to change to an HSA?

You didn't provide enough information to know. What are the copays/coinsurance amounts for both plans and the max out of pocket for both plans?

Let's just assume (probably incorrectly) that the max OOP and the coinsurance amounts are the same for both plans. In that case you are paying $4,344 in additional premiums for the regular insurance plan whereas the difference in the deductible for each plan is $2,900. In other words, assuming everything is equal (probably not) the HSA makes sense even in a year with a lot of medical expenses. In a year without a lot of expenses you would see even more of a benefit.

But again, the devil is in the details (co-pay/coinsurance and max OOP) and your historical medical expenses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I was looking at the "HSA Millionaire" thread and am very confused. Do people genuinely like HSAs better than just your run of the mill regular health insurance?

My employer offers regular health insurance for my family of 5 in which I pay $450 a month for health insurance, dental insurance and vision insurance, my employer pays the difference. My health insurance has a $600 deductible for my family. The HSA offered with expanded dental for $88 a month with a $3500 deductible for a family.

Would it make more sense for me to change to an HSA?

You didn't provide enough information to know. What are the copays/coinsurance amounts for both plans and the max out of pocket for both plans?

Let's just assume (probably incorrectly) that the max OOP and the coinsurance amounts are the same for both plans. In that case you are paying $4,344 in additional premiums for the regular insurance plan whereas the difference in the deductible for each plan is $2,900. In other words, assuming everything is equal (probably not) the HSA makes sense even in a year with a lot of medical expenses. In a year without a lot of expenses you would see even more of a benefit.

But again, the devil is in the details (co-pay/coinsurance and max OOP) and your historical medical expenses.

OP here - OOP max for regular insurance is $3000 for a family and OOP max for HSA is $10,000. All regular routine visits are $0 for both regular health insurance and HSA. After that its a $25 co-pay for regular doctors and $35 for specialists with regular insurance and for HSA its 20% after deductible is met.

[Anonymous]

We have one because we hardly ever go to the doctor's and have few medical needs. It makes sense for us to pay a little less upfront in premiums and have the tax advantages of the HSA.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I was looking at the "HSA Millionaire" thread and am very confused. Do people genuinely like HSAs better than just your run of the mill regular health insurance?

My employer offers regular health insurance for my family of 5 in which I pay $450 a month for health insurance, dental insurance and vision insurance, my employer pays the difference. My health insurance has a $600 deductible for my family. The HSA offered with expanded dental for $88 a month with a $3500 deductible for a family.

Would it make more sense for me to change to an HSA?

You didn't provide enough information to know. What are the copays/coinsurance amounts for both plans and the max out of pocket for both plans?

Let's just assume (probably incorrectly) that the max OOP and the coinsurance amounts are the same for both plans. In that case you are paying $4,344 in additional premiums for the regular insurance plan whereas the difference in the deductible for each plan is $2,900. In other words, assuming everything is equal (probably not) the HSA makes sense even in a year with a lot of medical expenses. In a year without a lot of expenses you would see even more of a benefit.

But again, the devil is in the details (co-pay/coinsurance and max OOP) and your historical medical expenses.

OP here - OOP max for regular insurance is $3000 for a family and OOP max for HSA is $10,000. All regular routine visits are $0 for both regular health insurance and HSA. After that its a $25 co-pay for regular doctors and $35 for specialists with regular insurance and for HSA its 20% after deductible is met.

PP here and I guess the question is whether you expect to have more than $4,300 of medical expenses per year? If not, the HSA is clearly the winner. The co-pays and the coinsurance probably won't be that much different between the two for a regular doctor visit if you look at an EOB after all the negotiated rate discounts. Obviously for a hospitalization that 20% for the HD plan will add up quickly.

[Anonymous]

My office offers an HSA plan with a relatively low deductible that costs more monthly than the true high deductible plan does — but the premiums worked out to roughly the same (maybe $30 a month more for family?) than the non-HSA PPO option at my spouse's office, and the deductible was only a few hundred dollars
higher than that plan's was.

In that case, the HSA plan was a no-brainer even for our family where both adults have expensive chronic autoimmune diseases: My office puts money into the HSA, which more than covered the cost difference, and the ability to save the money for future health care costs is great. We no longer worry about trying to make sure we've guessed the right FSA amount, only to wind up running out of money in October or scrambling to find over-the-counter stuff to spend it on so we don't lose it; we just put the max into the HSA, and whatever we don't spend, we'll have later.

Because we have high ongoing costs, I was pretty sure an HSA plan wouldn't work for our household until I sat down and did the math during an open enrollment period. Might be worth doing the same for others, too.

[Anonymous]

Yeah we’ve been enrolled in an HSA for over 10 years and I don’t think we’ve ever even hit $1k in OOP costs in a plan year.

[Anonymous]

Anonymous wrote:I was looking at the "HSA Millionaire" thread and am very confused. Do people genuinely like HSAs better than just your run of the mill regular health insurance?

My employer offers regular health insurance for my family of 5 in which I pay $450 a month for health insurance, dental insurance and vision insurance, my employer pays the difference. My health insurance has a $600 deductible for my family. The HSA offered with expanded dental for $88 a month with a $3500 deductible for a family.

Would it make more sense for me to change to an HSA?

The OP in that thread was likely not being honest with the numbers... He doesn't have a million in his HSA account - not at his age, with the IRS limits and how long HSAs have been around.

[Anonymous]

Anonymous wrote:Op here - we initially didn’t do it because I was pregnant a lot the past 9 years (6 pregnancies and 3 living children). But we are done having kids now and am wondering if it makes sense.

However things like kids surgeries (tonsil and broken arm) have come up 3 times in the past 4 years. I guess we could just pay till we hit the deductible and then 80% would be covered by insurance? We also have things like food allergies, kidney problem (hopefully resolved for one kid), and just regular visits for 5 people every year.

The best way to figure this out is do run a what-if scenario. Redo your medical expenses for last year on the assumption that it was a HSA and see how you fare. Don't forget to include the tax-saving from the HSA savings as well as any 'kicker' your employer gives you for choosing an HSA. More often than not, you'll find that an HSA works best pretty much in any scenario.

[Anonymous]

NP here. One of my kids had a broken arm this year. The total bill for the surgery and hospital stay and ambulance ride etc was almost $100k. The weekly visits to the orthopedist and follow up X-rays would have added to that. Fortunately we did not have a high deductible plan but presumably if we’d had one we’d have been on the hook for 20%? $20k?

I find it hard to understand how this can make sense unless you are lucky with accidents. We haven’t been. Two kids and this is the third accident requiring surgery in 3 years plus another routine broken arm, and prior to that when the kids were younger ENT and hernia surgery. Plus knee surgery for my spouse. And we’re generally very healthy.

How does it work?

[Anonymous]

I think it's great for older adults, but with young children, I prefer to have a low deductible and an FSA that is essentially prepaid. I tried an HSA one year (pre-kids) and I did not love that I couldn't get reimbursed until the money had built up. It meant that I couldn't reimburse myself for the $1500 MRI I got in January until like November.

[Anonymous]

Anonymous wrote:NP here. One of my kids had a broken arm this year. The total bill for the surgery and hospital stay and ambulance ride etc was almost $100k. The weekly visits to the orthopedist and follow up X-rays would have added to that. Fortunately we did not have a high deductible plan but presumably if we’d had one we’d have been on the hook for 20%? $20k?

I find it hard to understand how this can make sense unless you are lucky with accidents. We haven’t been. Two kids and this is the third accident requiring surgery in 3 years plus another routine broken arm, and prior to that when the kids were younger ENT and hernia surgery. Plus knee surgery for my spouse. And we’re generally very healthy.

How does it work?

You pay the first $X, whatever your deductible is. Ours is $3k per person, max $6k total for the family. So in your case would have been $97k covered, $3k paid.

This is assuming it was in network, of course.