Is HSA preferrable over regular health insurance plans?

[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?

That’s only if the plan is 20% coinsurance after the deductible, which is pretty bad. We have a HDHP with an $4K family deductible and then 0% coinsurance. My husband has a chronic illness for which his medications are $75K or more every year. We pay our family deductible of $4K (we hit that in January), stay in network for all treatment, and never pay anything else all year. With the lower premiums and the significant savings benefit of an HSA, we do much better financially with this plan that we would with the PPO options available to us.

[Anonymous]

Anonymous wrote:

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?

That’s only if the plan is 20% coinsurance after the deductible, which is pretty bad. We have a HDHP with an $4K family deductible and then 0% coinsurance. My husband has a chronic illness for which his medications are $75K or more every year. We pay our family deductible of $4K (we hit that in January), stay in network for all treatment, and never pay anything else all year. With the lower premiums and the significant savings benefit of an HSA, we do much better financially with this plan that we would with the PPO options available to us.

Op here - I just checked and our High deductible plan is 20% after deductible is met for things like ambulance, hospital stays, etc. it says nothing about co-insurance.

Regular insurance is $300 inpatient stay/$125 out of patient pay.

[Anonymous]

You have to run the math. For us, the premium saved each month x 12 is more than our deductible. Plus we can use the HSA. It’s a mental shift because every minor trip to the ped is now $160 (or whatever) so that takes some getting used to. We don’t actually pull from the HSA to pay it.

[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?

First, you only pay up to the out of pocket maximum. Second, you still get the agreed to rate that your inductance gets. They didn’t actually pay $100k.

[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?

The $100K is what the hospital, etc. bill the Insurance. Their negotiated rates will be much, much lower.

We have a HSA and the family deductible is $3200 (which we need to meet before copays kick in).
DC had minor surgery recently and the anesthesiologist billed $2400, but insurance negotiated rate was about $400 or so and our copay was $70. The doctor's cost for surgery was $600 but the negotiated rate was $250 and we ended up paying $50. Our share of the hospital bill was about $800 (we haven't seen their itemized bill yet. I'm guessing the inflated bill would be about $4-5K. All in, out cost (all copays) was about $1100 against a total billing (inflated) of, say, about $10K. Regardless of how much this was, our max copay would have been $4,600. BTW, if we'd gone with a PPO, the copay would have been $4,000. Lower deductible of course, but much higher premiums.

For 2023, we saved $1,800 in premiums, got $1000 from the company and seed money for the HSA and $2,500 tax deduction for using a HSA. Our deductible difference was -$2500 (excess deductible because of HSA) for a net savings of $2750 because we used an HSA. Assuming we were forced to use the full extent of our HSA (all 4 of us needed to use extensive medical services in excess of $25K each) we'd have ended up spending another $1200 over and above what we would have if we had a PPO reducing our savings by that amount. Still come out ahead by $1550.

HSA always wins.

[Anonymous]

So if you take a high cost medicine like Humira, the full cost of it comes out the first month of the year? Cash price for it is 9400$ with my current PPO insurance, copay 100$, and I pay 5$ with a copay card.
Because of this I have always been afraid of an HDHP. My spouse is on his own HDHP/HSA with 0$ premium, and me and the kids are on my traditional PPO insurance thru my employer.

[Anonymous]

Anonymous wrote:So if you take a high cost medicine like Humira, the full cost of it comes out the first month of the year? Cash price for it is 9400$ with my current PPO insurance, copay 100$, and I pay 5$ with a copay card.
Because of this I have always been afraid of an HDHP. My spouse is on his own HDHP/HSA with 0$ premium, and me and the kids are on my traditional PPO insurance thru my employer.

I’m the PP with the husband with high med costs. That’s basically l how it works for us. Though we don’t pay the full cost of his meds in January, just the deductible (full cost is something like $8K, but we just pay our $4K deductible). I misspoke above and forgot to mention there’s a $10 copay per month for his meds after we hit the deductible. Again, it will depend on the plan. If your plan makes you pay a percentage of meds after the deductible, then you will pay that amount until you hit your annual OOP max. But for us, it’s just the deductible in January and then the $10 copay for the rest of the year. And all of our other costs - kids’ sick visits, my own minor meds, etc - for the rest of the year are fully covered.

[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?

I had posted a question about HDHP and PPO a couple months ago and I loved a response I received there - "HSA is for those who are super healthy or super sick". Kinda made sense to me. I have kids who bring germs from school. Not that we see a doctor regularly but we do have multiple doctor trips throughout the year. We almost always sign up for HDHP and back out last minute to go for PPO. All these years, I have just never felt ready to do HDHP and hence HSA.

[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?

I had posted a question about HDHP and PPO a couple months ago and I loved a response I received there - "HSA is for those who are super healthy or super sick". Kinda made sense to me. I have kids who bring germs from school. Not that we see a doctor regularly but we do have multiple doctor trips throughout the year. We almost always sign up for HDHP and back out last minute to go for PPO. All these years, I have just never felt ready to do HDHP and hence HSA.

That's a false narrative. See my post (12:03 AM) above. We've been doing HSA since forever, raised 2 kids, and the math always works in our favor.

[Anonymous]

HSA Millionaires are not using HSA for healthcare. High-deductible plans are for healthcare.

HSA is a tax shelter for retirement, that is also allowed to be used for healthcare earlier in life.
It's like a health version of 529 that you can cash out when you get old.

[Anonymous]

Ive had an hsa for 10 years, and have 2 kids. The years i gave birth we hit our max, and never come close the other years. We have saved about $70K in our account. Our companies pay some of that, and its free money. We pay out of pocket for doctor bills and use the hsa for tax free savings. I think the math almost always works out for hsas to be better, but only if yoi value delayed savings.

[Anonymous]

Anonymous wrote:HSA Millionaires are not using HSA for healthcare. High-deductible plans are for healthcare.

HSA is a tax shelter for retirement, that is also allowed to be used for healthcare earlier in life.
It's like a health version of 529 that you can cash out when you get old.

NP, that is how we treat it. We have a high deductible plan. My company puts $2K a year into our HSA to offset the $4k per year deductible. We also max out what we can contribute to the HSA each year, but we never pull money out to pay for medical bills. We are using the HSA as a way to save for the future. This only works if you have enough $ to pay for all of your medical bills as well as contribute to the HSA.

[Anonymous]

Anonymous wrote:You have to run the math. For us, the premium saved each month x 12 is more than our deductible. Plus we can use the HSA. It’s a mental shift because every minor trip to the ped is now $160 (or whatever) so that takes some getting used to. We don’t actually pull from the HSA to pay it.

This. We made the shift to an HSA plan a few years ago. The first year was a mental adjustment, because it felt like pulling money out of savings for every sick visit. I had to tell myself that the HSA money didn't count as money yet because it would have already been spent as a premium under the regular PPO, and treat it like monopoly money until the end of the year. We don't have any chronic conditions or high cost recurring medical expenses, but if we did, we would switch back to the regular PPO. This year we've had (already!) a few specialist visits for our kids (pulmonologist for asthma testing, pediatric endo for a potential issue, etc.), so may not save as much this year as last. But even this year is a "loss," the 5 year average still puts us much farther ahead. But for regular healthy families that are done having kids, the math usually works out in favor of the HSA.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You have to run the math. For us, the premium saved each month x 12 is more than our deductible. Plus we can use the HSA. It’s a mental shift because every minor trip to the ped is now $160 (or whatever) so that takes some getting used to. We don’t actually pull from the HSA to pay it.

This. We made the shift to an HSA plan a few years ago. The first year was a mental adjustment, because it felt like pulling money out of savings for every sick visit. I had to tell myself that the HSA money didn't count as money yet because it would have already been spent as a premium under the regular PPO, and treat it like monopoly money until the end of the year. We don't have any chronic conditions or high cost recurring medical expenses, but if we did, we would switch back to the regular PPO. This year we've had (already!) a few specialist visits for our kids (pulmonologist for asthma testing, pediatric endo for a potential issue, etc.), so may not save as much this year as last. But even this year is a "loss," the 5 year average still puts us much farther ahead. But for regular healthy families that are done having kids, the math usually works out in favor of the HSA.

The math almost, always works in favor of the HSA, regardless of spend once you incorporate tax savings.
HSA Incremental Savings - Lower premiums, employer seed money, tax savings.
HSA Incremental costs - Higher deductible, Higher copay threhold.

The incremental savings typically offset the incremental costs.

[Anonymous]

Anonymous wrote:

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?

The $100K is what the hospital, etc. bill the Insurance. Their negotiated rates will be much, much lower.

We have a HSA and the family deductible is $3200 (which we need to meet before copays kick in).
DC had minor surgery recently and the anesthesiologist billed $2400, but insurance negotiated rate was about $400 or so and our copay was $70. The doctor's cost for surgery was $600 but the negotiated rate was $250 and we ended up paying $50. Our share of the hospital bill was about $800 (we haven't seen their itemized bill yet. I'm guessing the inflated bill would be about $4-5K. All in, out cost (all copays) was about $1100 against a total billing (inflated) of, say, about $10K. Regardless of how much this was, our max copay would have been $4,600. BTW, if we'd gone with a PPO, the copay would have been $4,000. Lower deductible of course, but much higher premiums.

For 2023, we saved $1,800 in premiums, got $1000 from the company and seed money for the HSA and $2,500 tax deduction for using a HSA. Our deductible difference was -$2500 (excess deductible because of HSA) for a net savings of $2750 because we used an HSA. Assuming we were forced to use the full extent of our HSA (all 4 of us needed to use extensive medical services in excess of $25K each) we'd have ended up spending another $1200 over and above what we would have if we had a PPO reducing our savings by that amount. Still come out ahead by $1550.

HSA always wins.

I’m the PP. I’ll see if I can run the numbers but the insurance paid $55k after it was discounted which was more than half and still a lot for less than 24 hours in hospital.