HDHP with HSA: Friend or foe?

This is a guest post from Joanna Lahey, an associate economics professor at the George H. W. Bush School of Government and Public Service and a faculty research fellow at the National Bureau of Economic Research. The opinions expressed in this post do not necessarily reflect those of the aforementioned institutions. This is the final article in her series on health insurance. Here are the first, second and third articles.

Remember way back when in my first post when we talked about what the “ideal” health insurance would look like given human beings' unfortunate tendency to moral hazard? Basically, the idea was that health insurance would not be complete: There would be strong cost-sharing early on, but it would protect people from a catastrophic loss of money. (Note: This is “ideal” only from a certain theoretical efficiency standpoint — there are many ways in which it is far from ideal.)

HDHP

High Deductible Health Plans (HDHPs) follow that basic model. The idea is that the client is responsible for all health care costs up to a certain high deductible, at which point the insurance kicks in, either with a coinsurance amount or paying 100 percent, depending on the plan. Frequently preventive care is provided for free prior to meeting the deductible (and under the provisions of the Affordable Care Act, we will be seeing more free preventive care). The size of the deductible is what makes it a “High Deductible” plan. In 2013, the minimum deductible for a HDHP is $1,250 for a single participant plan and $2,500 for a family plan. There's also an out-of-pocket maximum requirement for in-network providers, $6,250 for a single participant and $12,500 for a family. So a single plan at the legal limits would force you to pay $1,250 of your medical expenses upfront, and then a percentage of any remaining expenses until you hit the $6,250 out-of-pocket limit, at which point they pay the rest. Each year these numbers reset and you have a new deductible to meet and a new out-of-pocket limit.

One benefit of these plans is that the monthly cost to you is going to be less than for a plan that has a lower deductible. Insurance companies believe that if you're responsible for 100 percent of the costs up to a high point you'll be more likely to only use medical care that is absolutely necessary and they'll be less likely to have to pay anything. So they can charge less.

But is that smaller monthly payment worth it? If you're healthy and do not anticipate needing any health care, and, if, in the unlikely event that you get hit by a falling piece of airplane equipment, you'd be able to cover the deductible and out-of-pocket limit, then these plans can be a good deal. If, however, you know you're going to need some health care, but still likely to come under the out-of-pocket maximum, or if you know you cannot afford the deductible, then it may be worth it to pay more each month in premiums for the greater protection from a regular plan. If you expect a large amount of medical expenses, it is important to sit down and compare all of your options; the HDHP may or may not fit into your plan.

HSA

All of that is just looking at the HDHP in isolation. What really makes HDHPs attractive to some folks, especially those with an eye on financial independence, is that they can be paired with a Health Savings Account, or HSA. Without the HDHP, you cannot put money in the HSA.

An HSA works as an additional tax-advantaged savings vehicle, similar to an IRA. Each year you (and/or your employer) put money into the HSA tax-free, up to $3,250 for single plans and $6,450 for family plans in 2013. For those 55 or older, there's also an additional $1,000 allowed as a catch-up contribution. You can invest that money just like you would invest an IRA or 401(k). The money that goes in does not count in your adjusted gross income (AGI). A few states still ask you to pay state income tax on the money you put in, so you would only be saving at the federal level.

Do not confuse a Health Savings Account (HSA) with a Flexible Spending Account (FSA). An FSA expires every year and the money you didn't spend goes back to the company. You don't get to keep it. Companies can be tricky about this. My health care FSA is called a “Health Spending Account” and has the same acronym as a Health Savings Account even though it is not the same thing.

What happens to the earnings of the money that you invest in an HSA? Withdrawals for qualified medical expenses are tax-free. Qualified medical expenses include what you pay for your health insurance itself — the premiums, co-payments, and co-insurance, as well as medical care not covered by your insurance, such as dental or vision. You can use your HSA for durable medical equipment, even glasses, but you cannot use it for over-the-counter pharmaceuticals. You can even use HSA money to pay for transportation to get medical care.

If you withdraw money for a reason other than a qualified medical expense, you must pay taxes on the earnings and a 20 percent penalty. That's higher than the 10 percent penalty on your IRA. However, if you are over the age of 65 or on disability, you only pay taxes on the earnings, not the 20 percent penalty if you withdraw the money for something other than a qualified medical expense.

HSA vs. IRA/401(k)

In some respects, an HSA is even more attractive than an IRA because income goes in tax-free and the earnings are not taxed, so long as you use the money for qualified medical care. If you wait to withdraw the money until you are 65, the HSA is close to functionally equivalent to an IRA. If you don't think you'll need retirement money until age 65, or if you plan to have medical expenses in the future (and who doesn't, these days?), then sticking the maximum amount of money in an HSA can be a savvy financial move.

However, HSA money is restricted: If it is not used for medical care, you pay a pretty high penalty until you hit the age limit. And the age limit is higher for an HSA than it is for most retirement money. If you think you're going to need that retirement money before age 65 for something other than medical expenses, an HSA may not be the best place to stash it.

If you've already maxed out your tax-advantaged savings vehicles, should you pick out the HDHP just so you can get the HSA? There's no single answer to that question. It will depend on your expected medical costs, your risk preferences, and the alternative plans that you have available. If you don't have a whole lot of extra cash each year, the HDHP with HSA can be a risky proposition, but if you don't have a whole lot of extra cash, then you won't be able to put much in the HSA anyway.

Do you have an HDHP with an HSA? Do you like it? If you've been considering a plan, what aspects have you been thinking about?

More about...Economics, Insurance

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Darcy
Darcy
7 years ago

Joanna, better check the statement about being able to use HSA funds to pay for health insurance premiums. When I researched this a few years ago, the IRS regs allowed this only when you were on COBRA and for long-term care (e.g. nursing home) insurance premiums.

Rusty Williams
Rusty Williams
7 years ago
Reply to  Darcy

That is correct. You can not pay your HDHP premiums from your HSA.

Joanna Lahey
Joanna Lahey
7 years ago
Reply to  Darcy

You’re right. It can only be used to pay premiums under a limited set of circumstances. So yes, if you are on unemployment, but no if you are getting your insurance from your current employer and don’t meet other qualifications. I apologize.

Steve
Steve
7 years ago
Reply to  Darcy

Can you pay your premiums under a “cafeteria plan”?

Rusty Williams
Rusty Williams
7 years ago

One problem with healthcare today is the entity paying for the coverage (insurance company) is not involved in the decision making process. Doctors and patients have no idea how much a procedure costs. You can not control costs when you charge what you want to the credit card and someone else pays the bill. It’s not that I think the insurance company should be the only one making the decision either. Like the article explains, HDHP’s put you in the decision making process and you are more likely to have a discussion with your doctor regarding the necesscity of any… Read more »

Laura Thomas
Laura Thomas
7 years ago
Reply to  Rusty Williams

Rusty – agreed. The ACA is primarily set up to break insurance companies and force us into single payor. Basically, either a Canadian or British “national health service” type of healthcare. It may be closer to what they have in Japan or Germany, but whatever – it will be single payor and we’ll all pay through our INCREASED taxes. I’m not sure this is a terrible thing, but it will be different and it will lead to healthcare rationing, no matter what sweet or fancy words you use for it. It will have to. On the other hand, NHS in… Read more »

James
James
6 years ago
Reply to  Laura Thomas

Please. How can anyone say health care is not rationed now? It is. The prices for most procedures are outrageously high and, frankly, unaffordable without insurance. So insurance companies today are exactly the “death panels” that opponents of health reform crowed about in 2008.

Jim
Jim
6 years ago
Reply to  Laura Thomas

I lived and worked in the UK for many years as a US expatriot (i.e., US citizen and non-permanent UK resident) in two different stays for the same employer. I had only NHS the first time. The second time, I had NHS and BUPA (a private health insurance company, perhaps the largest one) since, under my “conditions of stay” I paid into the NHS and my employer had added BUPA to their benefits. The reason they had added BUPA to their benefits is that by the time of my second stay in the UK, the NHS quality of care had… Read more »

EmJay
EmJay
7 years ago

My husband and I are in our late 20s/early 30s and healthy, and I love the HSA model. We have the catastrophic coverage we would need in the case of an emergency, and the plan is very cheap (or free in our case, as all the money that is taken from my paycheck is put into the HSA for medical expenses). I think the hardest part is deciding how much to put into the HSA. Ideally, we would probably carry as much as the maximum out-of-pocket, but we currently don’t do that, and would rely on our emergency savings for… Read more »

Laura
Laura
5 years ago
Reply to  EmJay

Wait till you are in your late 40’s early 50’s, or have kids.
Your view of HDHP’s will change. They are perfect for the young and healthy. Not so much anyone else.

BTW- my always healthy oldest daughter was diagnosed with a rare aggressive cancer at 29. She only lived for 7 weeks after diagnosis, but those 7 weeks were EXPENSIVE

Tom Murin
Tom Murin
7 years ago

Very good post. My company contributes $2,000 to my HSA as well. Their savings are significant as well since they pay about 80% of the cost of health insurance. I think they should pay more, but I won’t push the issue. The high out of pocket maximum is pretty intimidating, but I’m sure you’d pay a fair amount under a traditional plan with the same level of treatment that would max out the HSA. Most folks are paying for “god forbid” coverage when after a few years with an HSA they would come out well ahead. Last thing, that “free… Read more »

Joanna Lahey
Joanna Lahey
7 years ago
Reply to  Tom Murin

Actually, that free preventative care may gain money, if it solves an adverse selection problem that was keeping insurance from offering it before. If preventative care lowers costs by keeping people from getting chronic diseases or catching things early, then it’s better than free. But individual insurance companies may not want to offer it if they think that only people with family histories of disease will take it up (adverse selection) or if they think that some other insurance company will be getting the benefits later on. If all insurance companies are mandated to offer it, then that won’t be… Read more »

CT
CT
7 years ago

Do HSA’s carry on regardless of employer? My husband’s job (assuming he doesn’t leave this year) has made it clear they will no longer provide their excellent health plans and we will have to use the public exchanges in 2014. So much for taking lower pay because the benefits were good. The HDHP and HSA’S make a lot of sense for us, but it seems like only if we will use them for a longer period of time than one year? If we still have access to the HSA beyond this year, we may do it. Can we contribute in… Read more »

Charlotte
Charlotte
7 years ago
Reply to  CT

I’m a freelancer and have a HDHP with an HSA — since I don’t have an employer, mine is portable. I’ve been quite happy with it — I get preventative care for free, which is about 90% of what I’ve always used anyhow, and I can write off ancillary expenses I pay out of pocket like my acupunturist or therapist. Plus it offers me some extra long-term savings. I’m in my late 40s, so we’ll see, but knock wood I’m healthy and have a good local clinic where visits are affordable for things like the occasional bout of strep throat.

Holly@ClubThrifty
7 years ago
Reply to  CT

I have a HDHP with HSA and I “own” my HSA. I contribute to it via payroll deduction but all the money in the account is mine. If I were to switch jobs, it is still mine and I take it with me. Not only can I contribute via payroll deduction, I can also make contributions myself. The only difference is that I would report that on my taxes since any contributions I make not through payroll are with after tax money. I hope that helps!

Kim B
Kim B
7 years ago

Thank you for explaining the difference between HSA and FSA. In the past I’ve had employers who have offered FSA’s with a name that sounded more like HSA, so I never understood why a person would want an HSA if they expired every year. Now it makes so much more sense, and sounds more appealing should we need to ever change our health insurance.

Tom
Tom
7 years ago

You can use the HSA for over the counter medications if you have a prescription. There is an added level of inconvenience and record keeping, but it is allowed.

Mad Fientist
Mad Fientist
7 years ago

This was a great series, Joanna! I really hope you’ll be back to write additional GRS articles in the future. Another great thing about an HSA that I’d like to point out is that there isn’t a time constraint on when you need to withdraw money from it for a qualified medical expense. For example, if I have a $1000 medical bill, I can just use my personal checking account to pay for that expense and I can leave that $1000 to grow in my HSA, tax free, for as long as I want. Since I have a receipt for… Read more »

Lance @ Money Life and More
Lance @ Money Life and More
7 years ago

I do have one and love it. I’m younger and my company puts free money in it for me. On top of that the premiums are much cheaper.

I rarely ever go to the doctor so don’t mind paying for it the few times I go and I have coverage from catastrophe.

Stacie
Stacie
7 years ago

I think it’s great. This past year, premiums were free and our employer would put $100/month into the HSA. Next year, we will be paying about 10% of the premium. I hardly go to the doctor, so I’ll be happy to let their contributions grow for when I do need them. Our company offers a couple other options, but they’re quite expensive AND you miss out on the free HSA money.

Matt
Matt
7 years ago

It’s not worth it if your company doesn’t contribute and you’re on a maintenance prescription drug (e.g. Lipitor) which is not covered until I meet the huge deductible.

Tom
Tom
7 years ago
Reply to  Matt

You can’t really say that without examining the numbers. Where I work, the family HDHP+HSA is about $2400 and the PPO is over $5000, plus a $900 deductible. So if I spent $3000 on medical care, for a year of Lipitor and a doctor’s visit or two, it was still worth it for me to get the HDHP. My company also contributes to my HSA, tilting the comparison towards HSA even further. Furthermore, the insurance company offers plans like this to coerce you to find cheaper care. Maybe you would try a generic statin if you were unhappy paying $180… Read more »

Matt
Matt
7 years ago
Reply to  Tom

Agreed, you need to examine the numbers, ** and I would add this is incredibly difficult / time-consuming for your average employee ** but my point was that as a rule-of-thumb, if your company is not contributing (and most DO) and you’re on a maintenance drug, it might not be worth it for you. Employers should make it simple to understand, and my personal experience has been the exact opposite. Just look at how many GRS readers, whom I would argue are of superior finance intellect, are themselves struggling with the decision. And you think the average American is going… Read more »

Bryan
Bryan
7 years ago
Reply to  Matt

You definately need to do the math. The maintenance prescription might not be as much of a non-starter as you think. With many of the HDHP plans, prescriptions are 100% covered once you’ve met the high deductible but under a traditional plan would still require a co-pay every time. As an example, I know one person who’s arsenal of maintenance medications alone more than maxes out the high deductible, meaning all other expense/prescriptions/etc. for the year are 100% covered. Under a traditional plan, they would be paying huge co-pays every time and the costs would keep adding up to well… Read more »

Madeleine
Madeleine
7 years ago

I am a US citizen resident abroad. I am also self-employed. Is it Possible for someone like me to get either an HSA or HDHP? While visiting the US, I fell and broke my leg, which is costing me around $30,000 (in Italy care would have been virtually free because I am resident there and pay taxes). For me, one of these plans would have been a lifesaver. Moreover, such a plan might allow me to get organized for a return to the US.

Babs
Babs
7 years ago

Thanks for this good informative series.

ExpatEngineer
ExpatEngineer
7 years ago

Just a note for women of child-bearing age… you could be on the hook for a huge payout for pregnancy/birth with an HDHP plan. A friend of mine had a pregnancy that went over two calendar years. She was forced to pay the entire family deductible both years due to some mild (and very normal) health complications. Her pregnancy therefore cost over $10k out of pocket. Even with employer cost matching into her HSA this was obviously a tremendous burden. Another thing to note is that HSAs have complicated tax rules if you leave your HDHP. For instance, I joined… Read more »

Bryan
Bryan
7 years ago
Reply to  ExpatEngineer

I have been wondering about this too. I’ve had the HDHP w/ HSA for a few years and plan to keep it for now. Based on discussions with other employees who have had kids recently, I was thinking about switching over to a regular plan when we get ready to have kids. I have noticed though that when I do my taxes, there is some very confusing language regarding the HSA and if you were or were not still in an HDHP at the end of the year. Given the recent trend of health plan topics, anyone on GRS interested… Read more »

Ben
Ben
7 years ago
Reply to  ExpatEngineer

Not only that, but a few states even tax HSA contributions. I was was burned by this a number of years ago. “Free” money from your employer isn’t always free…

Darby
Darby
7 years ago

Found HSA to be much more expensive for my family. Did not get much discount after switch from traditional. Was responsible for almost all costs below $6500. Have switched to an employer with traditional insurance and my costs are thousands less. I guess it depends on how much your employer contributes.

Steve
Steve
7 years ago

As a follow-up, it would be nice to show some hypthetical scenarios to highlight the difference in costs of PPO/HMO/HDHP – with the full premiums shown, not just the employee’s contribution. I suspect that with the ‘Affordable Care Act’ there may be more people forced out of the ‘Cadillac’ plans they are in now with small companies. Knowing the full costs of each type would be enlightening. My company allowed my wife to be in their plan, but we had to pay 100% of the insurance costs. The premiums were almost $700/month, and the deductible was $2000/yr, with 80%/20% paid… Read more »

Laurel
Laurel
7 years ago

This is timely for me. My “cadillac plan” is being eliminated and I have to choose between a traditional plan and an HDHP/HSA plan. The insurance company has a nice calculator that let me plug in various scenarios, including changing employer contributions and emergency room visits. It seems like the HSA is the way to go for my healthy self and my healthy daughter. But I haven’t signed on the dotted line yet.
If anyone does have to make a choice, I definitely recommend the on-line calculators.

tracylee
tracylee
7 years ago

We got a HDHP with HSA for my self-employed husband, since I am still on student insurance. I would love to see an article about the HSA side – where do people have their accounts? What is the process for investing? Fees? Other details? We have yet to set up his HSA because the bank I want to use charges a $5/month fee until you reach $5,000 in the account. I am assuming I can set up the account in March and contribute the 2012 maximum and the difference to reach $5k as a 2013. Anyone know if this scenario… Read more »

ExpatEngineer
ExpatEngineer
7 years ago
Reply to  tracylee

Normally you can only contribute 1/12 of the maximum amount to your HSA for each month that you are in the plan. However, there is also an “end of year” rule where if you in an HDHP on Dec 31 you can contribute the maximum HSA amount for the whole year. HOWEVER, it turns out that if you leave the HDHP the following year you will have to pay tax on the amount above the 1/12 per month that you contributed the previous year. (i.e. if you joined in July 2012 and put the full amount in in December 2012,… Read more »

Steve
Steve
7 years ago
Reply to  tracylee

You might try to see if any credit unions have an HSA option. Mine offers a service-charge free one that pays competitive interest. Try the online banks too.

David Raff
David Raff
7 years ago

Glad to see you discuss this topic. HSAs can work well in certain but not all situations. HSAs generally work best for individuals or families in generally good health. If you typically have significant medical expenses and are already able to deduct medical expenses, the pretax benefit of HSAs is diminished.

If you live in California, note that HSA contributions are not deductible for state tax purposes.

Adrian
Adrian
7 years ago

I have an HDHP and I HATE it so much. It is very complicated and unpredictable. I have to figure out my care through 3 completely different and hard-to-navigate websites – one for the HDHP, one for prescriptions and one for “Wellness”. I am terrified that we are going to have some serious healthcare situation that is going to put us into debt to get to the out of pocket maximum. That wasn’t as big a worry on our previous plan. I am surprised when you keep saying that the premiums should be lower. This plan is costing me $40… Read more »

Joanna Lahey
Joanna Lahey
7 years ago
Reply to  Adrian

HDHP have some definite downsides.

Health care costs have been increasing at a steady clip for a long time. Chances are that even though the HDHP costs more in premiums than your insurance last year, it costs less than the same insurance would this year. Additionally, your employer may have shifted more of the premium costs to you, which is something employers have started doing more of as heath insurance costs go up.

Lindsay
Lindsay
7 years ago
Reply to  Adrian

Yes, I have an HDHP with an HSA through my employer, and what I pay for premiums is pretty close to the highest amount that would be allowed for my family’s income bracket under the Affordable Care Act. I always put the max amount in, though, so I’m lucky that I can do that, although this year it’s been running on empty ALL YEAR because I had a baby in January. The one thing I really like about the HSA is that it lowers my tax bracket, because the money that goes into it is removed from your taxable income,… Read more »

tosajen
tosajen
7 years ago
Reply to  Lindsay

According to several sources, you can use HSA funds to pay insurance premiums in the following circumstances:
– Long-term care insurance premiums
– COBRA health care continuation coverage premiums
– Premiums for health coverage while an individual is receiving unemployment compensation
– For individuals over age 65 certain medicare premiums

So, in our case, where we pay for our own insurance and are self-employed, we can’t use HSA funds. Boo.

Kelli
Kelli
7 years ago

We have a family HDHP and HSA and have maxed out our 8000 max out of pocket every year since we have had kids. My husband does not have a premium however and the 8000 max is less than the premiums we would have to pay for a traditional plan plus co-pays through my work. Really compare the costs, even though 8000 is a lot, we take it out of his pay each check like a premium and if we don’t hit it one year, at least we don’t loose it. 2 of the years we hit it in March… Read more »

MC
MC
7 years ago

I understand the premise of this model, it’s up to each family/individual to be responsible in the care that they seek. However this assumes that the healthcare market place is a rational market place rather than one where most of the care being of a need often beyond ones control. It is not a rational marketplace. If your family needs lots of care, as my family does, it’s regressive. This model shifts more and more of the expense to those who have the need and it’s being driven by employers. It’s regressive in it’s nature that, in order to seek… Read more »

Michael
Michael
7 years ago
Reply to  MC

You are horribly mistaken. Health care as a “public good” results in rationing, lack of accountability, and a halting of medical progress. It sounds good in classrooms, but this is the real world.

Ken Laxton
Ken Laxton
7 years ago
Reply to  Michael

Thank you, Michael, you are exactly right. Through the ACA, health care cost will go up, health care service will go down, and the administration of it through our federal government, will require an ever-increasing tax. This is the beginning of the end of our world class care in the United States.

lawalte
lawalte
7 years ago

Since I no longer have a reliable income source, and limited savings, I am taking distributions from my IRA to fund the HSA (no early withdrawal plenalty). The IRA has better ivestment choices, and a better chance of growth, so I don’t max out on funding the HSA that yields .02

tosajen
tosajen
7 years ago

Thank you for this series! Are you planning to cover ways to find and calculate the best health insurance for a given situation? Marketplace Money mentioned a few things recently, but it’s all very “it’s out there. . . good luck!” Scary stuff! We have about 6 weeks until our COBRA is done (18 mos). We’ve been paying a LOT each month for our family of 4 (with a few pre-existing conditions) for the not-quite-Cadillac plan of my previous employer. We pay almost $15k/year for COBRA, and I know we’ve paid another $2-3k on top of that for copays, medications,… Read more »

jim
jim
7 years ago

I have had an HDHP/HSA plan for a few years now. It works great for us compared to the other plans offered and is generally low cost. But my employer has structured the HDHP/HSA options so its the cheapest choice for employees even with the high deductible. Ours has $0 monthly premium so you just pay the deductible/co-insurance. I’m sure some HDHP/HSA’s from some employers are not as good cost wise compared to other options.

Tina
Tina
7 years ago

If you are on the HDHP and have an HSA, you can also contribute to a Limited FSA which can pay for vision and dental expenses only. This could also help you get a tax benefit for those expenses. So if you are spending more in your HSA and have major dental work ahead, you could plan for more savings. As with a regular FSA plan, it is a “use it or lose it” rule so be careful how much you elect.

Ramblin' Ma'am
Ramblin' Ma'am
7 years ago

I commented on the previous post on this series that I was considering signing up for the new HDHP/HSA plan being offered at my job (we also have a traditional POS option). I did take the plunge and sign up. There is a $1500 deductible, but the company contributes the first $500 to the HSA. Preventive care is covered; prescription drugs just have a low co-pay. Our vision and dental plans are separate. Our HR department was really pushing this plan, but sort of glossing over the high-deductible aspect. I know some of my colleagues who blow through their paychecks… Read more »

PAUL
PAUL
7 years ago

Is it possible for me to have full family coverage under my wife’s healthcare plan but also sign up for my employer’s HDHP and HSA to take advantage of the $1000 they deposit into it for me each year? The family plan would cost me a little under $1000 a year, so basically this would force me to direct $1000 a year in savings into the HSA. Would this be beneficial for me to do as a “just in case” with a loved one? That would be the only reason I would see ever using the HSA before medical costs… Read more »

Steve
Steve
7 years ago

I have had an HDHP for a couple years now. I am healthy and rarely see a doctor. However, I also ran some scenarios through my favorite spreadsheet program. I considered the difference in premium between the HDHP and the tax benefits from an HSA. I charted total healthcare costs (paid by me or the insurer) including some assumptions about how it would break down (e.g. copays). What I found on that chart, between my employer’s offered plans, was that there was only a narrow range of healthcare costs where the cost to me, including premiums and out of pocket… Read more »

Chuckie
Chuckie
7 years ago

The key problem with HDHP is that doctors and hospitals approach care as if cost is of no consequence, and well it is. Ever tried to get the cost of a test before they give it to you? Good luck. Ever tried to get the cost of an ibuprofen pill or even better say no thanks I stopped by Costco on the way in and brought my own. Good luck there too. When my wife was pregnant we hospital shopped in San Diego and I asked “what is the cost of a typical pregnancy with no complications” and each hospital… Read more »

Bryan
Bryan
7 years ago
Reply to  Chuckie

I’ve been on an HDHP a few years now and have run into exactly this. Many providers have no idea how much they will actually be charging you until weeks later. After one recent appointment, I left having been charged nothing at the time and with no bill in my hand. The provider had to submit the bill to the insurance company, who then adjusts things to their “in-network” “usual and customary rates” and sends it back to the provider. Then the provider finally has a bill drawn up and sent to you. It wasn’t until a month after my… Read more »

Laura Thomas
Laura Thomas
7 years ago
Reply to  Bryan

I think this is a really good point but it’s one that is both personal and political. On the personal level, those of us with these types of plans, have to begin to be MUCH more pro-active in asking questions and getting answers. And, to some extent, doing cost comparisons. Yes, healthcare providers, HATE that. Truthfully, you’re right – doctors and hospitals act as if costs have no consequence when obviously it does. So the political side (no matter your political ideology) is that we all have to begin to understand that healthcare and insurance costs money. And that is… Read more »

Bryan
Bryan
7 years ago
Reply to  Laura Thomas

How did you actually find out the costs ahead of time? I’ve been having this issue with every provider I’ve seen under this plan. I get the treatment, then never see anything in the way of billing for a month or more and of course the nurses know nothing about the costs. For example I needed stitches (I thought), but it turns out it was small enough they glued it shut and gave me a tetanus shot (as mine was out of date). I went to the hospital’s version of an urgent care clinic cause it wasn’t ER worthy, because… Read more »

James
James
7 years ago

My company recently shuffled around it’s health plan options, forcing me to switch plans–I was looking at paying double in premiums for a PPO where a significant amount of my healthcare will very possibly be out-of-network. I wasn’t thrilled, to say the least. I was double-checking my benefit elections the other weekend and idly going through my company’s info tool and it started predicting that I would save more money with a HDHP. I was surprised, to say the least, because I have a chronic health condition (Cystic Fibrosis) so I have lots of doctor visits and prescriptions to cover,… Read more »

abby
abby
7 years ago

i have one through my work and i love it. i’ve made money every year (they put in 1000 a year)and all preventative care is covered. after 3 years i have two times the deductible in there (ded of 1500)plus it has paid for some contacts, fillings, and prescription sunglasses. love it!

Louise
Louise
7 years ago

I took an early retirement @ 55 to take care of my mother and keep her out of nursing home. I worked for a state agency and kept my insurance when I retired, but paying full price of $600 a month with a $1,500 deductable. In 2013 I’m paying $400 monthly with $2,500 deductable. I’m not working now and wonder why I cannot deduct my premiums from HSA account. Also, if I deposit the max. allowed in my HSA, can I deduct that entire amount from taxes even if I do not use all of it by the end of… Read more »

Eric Gross
Eric Gross
6 years ago

So can a young healthy employee or a business owner obtain the tax shelter benefits of both an HSA and an IRA?

Deborah Tutnauer
Deborah Tutnauer
5 years ago

I’m glad I found this thread. For many years I am grateful we have been “spoiled” with great low deductible, reasonable premium indemnity health plans through my husband’s bank jobs. Recently he changed jobs to one of the larger banks in the US and the health insurance is crazy making. I have spent at least 20 hours trying to understand the pros and cons of the different options…and also how it fits in with his upcoming eligibility for Medicare. The HSA plan makes sense as a savings tool and to have more control The HRA plan makes it easier to… Read more »

John
John
5 years ago

First of all i have a question for everyone. Is there an affordable i mean under $100 bucks a month. I work at parts store full time and only make 9 bucks a month. Health insurance through the company would cost me $150 a month and i wouldnt get anything for it. I mean i have been to the doctor an average of once a year and am on no meds. Is there an hsa or fsa that is affordable and would benefit me. Any advice would be helpful. On another note i find it horrible that people on the… Read more »

john
john
4 years ago

There are a lot of analysis of HDHP and CDHP from the perspective of vague form: these plans rely more on self-insurance, and you take more risk. Not a lot of hard financial numbers. My CDHP with HSA lets me stash $3,500/year in HSA. I have a per-calendar-year maximum of $3,500/year out-of-pocket expense, so I need $7,000 on hand in case of a long, expensive, year-end medical emergency. Risk. Let’s quantify that risk. Per year, I’m facing a maximum $3,500 gross income loss. That’s before taxes: prescriptions, office visits, and emergency care can total approximately $2,350 out-of-pocket, compared to a… Read more »

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