High Deductible Health Insurance Plan

[Anonymous]

We switched to the Carefirst HDHP this year after doing a LOT of math. For us, BCBS Basic was just under $10K/year, including our FSA contributions. The HDHP will be less than $3K, with a deductible of 3300. So even if we max out our deductible, we are coming out way ahead. We are maxing the HSA account, and taking the tax advantages. Our total spend will be about $11K, so a little more than under Basic - but a much greater share of it is tax-advantaged savings, or available to us beyond this year.

It is a big shift in thinking, and I was pretty cranky to pay sticker price for prescriptions in Q1. But between the prescriptions and a couple of appointments, we've hit our deductible so everything else should be inexpensive (relatively).

[Anonymous]

Anonymous wrote:If you're in DC area, I bet deductible will exceed any reimbursements you could receive for out of network. no way. go for PPO with lowest deductible

Premiums are more expensive. It’s hundreds of dollars every single month no matter what happens, plus you still pay when you need medical care, just less.

[Anonymous]

Anonymous wrote:HDHP is almost always a better deal, but you have to get used to shelling out money knowingly vs. it all being taken out of your paycheck without you paying attention.

It's not at all the better deal if you have a lot of medical costs.

[Anonymous]

How do prescription costs work? I have one very expensive medication that I take every month.

[Anonymous]

HD has been great for us (family of 3 in DC). HSA is basically an extra employer funded retirement account.

[Anonymous]

I’m struggling with this now. Switched from BCBS to GEHA HDHP at the beginning of the year. I’m not used to the bills from doctors and my husband would rather pay higher premiums for a copay. We have some medical procedures we need to do so I’m trying to convince him to schedule these early in the year to hit the deductible. He’s driving me crazy about the bills so we may need to switch back next year for my own sanity.

[Anonymous]

We have GEHA standard, and every year I debate going to the GEHA HDHP never seem to be able to figure out if it is a better deal. Has anybody done it, and how has it worked out?

[Anonymous]

We has a high deductible plan with COBRA now. How does that work?

[Anonymous]

Anonymous wrote:How do prescription costs work? I have one very expensive medication that I take every month.

You would pay the $1k per month or whatever for the price of your prescription and then after many months it goes down in price when you meet the deductible. You need to do the math.

[Anonymous]

We made the same switch. It’s a big cost savings for us. In the beginning of the year, we put money aside each pay period and earmark it for medical expenses.

[Anonymous]

One has to do a basic math or ask chatbot to do it for you but typically HDHP come out of regular plans.

Big variables are monthly premiums, max out of pocket and coinsurance %.

Say X = monthly premium and Y is max annual out of pocket then a good approximation of the max annual outlay is 12*X+Y

Compare the result above for the plans your employer offers and act accordingly. HDHP also gives you HSA and a lot of companies kick in 1000-2500K into the HSA in the beginning of every year so subtract that form the formula.

All this assumes one can manage money has enough saving discipline.

[Anonymous]

Anonymous wrote:We switched to the Carefirst HDHP this year after doing a LOT of math. For us, BCBS Basic was just under $10K/year, including our FSA contributions. The HDHP will be less than $3K, with a deductible of 3300. So even if we max out our deductible, we are coming out way ahead. We are maxing the HSA account, and taking the tax advantages. Our total spend will be about $11K, so a little more than under Basic - but a much greater share of it is tax-advantaged savings, or available to us beyond this year.

It is a big shift in thinking, and I was pretty cranky to pay sticker price for prescriptions in Q1. But between the prescriptions and a couple of appointments, we've hit our deductible so everything else should be inexpensive (relatively).

I'm this PP. One other thing I think gets lost is that the benefits of the HDHP really accrue over time. The first year in particular feels expensive because you are paying your deductible before the HSA funds have accrued. But assuming you max your HSA and have medium or low health care usage, then in year 2 you can reimburse yourself for the deductible out of the existing HSA funds. By a few years in, you should have enough in the HSA to cover the out of pocket max in a high-usage year, which lets you put health savings on autopilot with better budgeting ability.

[Anonymous]

Anonymous wrote:How do prescription costs work? I have one very expensive medication that I take every month.

You pay sticker price until you hit the deductible, then a copay based on the medication tier. You can lookup the medication for your plan and figure out your monthly cost after you hit the dedcutible. Also depending on the type of medication, you may be able to get a 3-month supply for a lower copay.

[Anonymous]

I didn't have the HD plan at my job for 15 years. When i switched jobs and ran the numbers I realized what a HUGE mistake I made. An HSA is the best possible saving vehicle: tax free and and out. I should have maxed my HSA as an investment vehicle and gone HD. In the 15 years I would have saved money (premium+deductible) in all but 2 years and even in those years the HSA made it a wash. As others have said it is a bit of a mental hurdle to overcome and the first few times you get a bill it is a shock. But always keep in mind the premium savings (which are guaranteed) vs the out of pocket. This is especially so if your employer gives you a contribution towards an HSA as an inducement to choose HD plans.

If your family is generally healthy I would take a hard look at the HD. But DO NOT spend the money in your HSA. Let it grow tax free.

[Anonymous]

You really do just have to look at your healthcare usage and at the particulars of your available plans and do the math. What would be better in a typical year and could you afford the worst-case scenario? My family uses a lot of healthcare because several of us have chronic conditions (including a small child who needs serial MRIs which have to be done under sedation) and so we are basically guaranteed to hit any out of pocket max any year. With the plans that we have available at the prices we are charged, the HDHP never makes sense. But if it's a good option for you, the tax benefits can be super great, as others have said.