Is HSA preferrable over regular health insurance plans?

[Anonymous]

In this example, the HSA seems like a no-brainer although it would appear reading through the thread that the HSA insurance doesn't provide as much coverage as the current insurance.

You also have to factor in the tax savings from putting $8800 (is that the max family HSA contribution?) pre-tax into your HSA.

That is $8800 less of taxable income vs. sticking with your current plan. If your marginal tax rate is say 35%, well that is another $3,000 of savings.

[Anonymous]

Anonymous wrote:In this example, the HSA seems like a no-brainer although it would appear reading through the thread that the HSA insurance doesn't provide as much coverage as the current insurance.

You also have to factor in the tax savings from putting $8800 (is that the max family HSA contribution?) pre-tax into your HSA.

That is $8800 less of taxable income vs. sticking with your current plan. If your marginal tax rate is say 35%, well that is another $3,000 of savings.

NP and I'm not sure that's entirely right. While the HSA contributions and gains are tax free subject to withdrawal ruled the premiums on the regular policy are tax free as well so you should only count the tax benefits on the delta between the two.

[Anonymous]

Anonymous wrote:

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.

DP here. Still seems off. My bill for delivering a baby and staying two nights was $8k. My husband’s vasectomy was way lower than that.