PPO or high deductible plan?

[Renee in NC]

Trying to figure out my options.

 

HD plan is $1200 a year, and my employer contributes $1400 to my HSA up front. Deductible is $1200/2400 (indiv./family), 20% after that with max. out of pocket of $6400.

 

PPO is $2015 year, no employer contributions. Prescriptions are $10/50. Deductible is $250/500, 20% after that, and a max out of pocket of $5000. Monthly prescriptions would be $60 a month.

 

Both cover preventative care at 100% with no deductible. Even with paying for the monthly prescriptions (about $350 a month), it seems that we will save $500 a year with the HD plan. The HSA can carryover, too, so what we don't use can accumulate over time.

 

I am so used to the copay type of plan that a HD plan makes me a little nervous, even when I can see the numbers myself. Which would you do? What do you have?

[sbgrace]

I'm looking at your numbers and it looks like, whether you use it for the bare minimum of prescriptions alone or instead have a horrible medical year and hit your maximum out of pockets, you are still financially better off with the high deductible option.

 

I figured it would be that way when I saw your title. They set them up like that on purpose...I think so people try not to see their doctors. Our high deductible option is a $5,000 deductible before they even start their 20% and it's still priced to be our only real option.

Edited August 21, 2012 by sbgrace

[Jenny in GA]

Trying to figure out my options.

 

HD plan is $1200 a year, and my employer contributes $1400 to my HSA up front. Deductible is $1200/2400 (indiv./family), 20% after that with max. out of pocket of $6400.

 

PPO is $2015 year, no employer contributions. Prescriptions are $10/50. Deductible is $250/500, 20% after that, and a max out of pocket of $5000. Monthly prescriptions would be $60 a month.

 

 

I can't help you ... I couldn't even finish reading your post because I am so envious. Our insurance is $1400/month, and a fairly high deductible.

 

Good luck with whatever you choose!

[tabrizia]

We had a similar choice last November and went HD, there was a grey area in there where it would have been better to go PPO for us, but it was only for a small amount of money. Since we blew through the out of pocket in one day, it didn't end up an issue either way for us. Looking at yours the HD looks like the better choice, just make sure you have enough in the HSA to cover everything.

[rwjx2khsmj]

A huge advantage of the high deductible plan is the HSA. All your contributions to it are pre-tax. Figure out how much you need to put away monthly to make your yearly deductible. From what you've said, including your employer contribution, that would be about $1000. If you can afford it put in enough monthly to cover your maximum out of pocket. If you can't afford that right now it gives you a goal over time. If you know you have $350 in prescriptions put that amount into your HSA monthly. By having those funds deposited into your HSA your medical expenses will be covered and your taxable income will be lower.

[AlmiraGulch]

I was faced with the same choice, nearly the same amounts. I used the tool my employer had on the site to plug in scenarios to come up with the best option. I think even with 2 family dr visits per person, a couple of specialists, 1 ER visit and a surgery (based on the amount of my surgery last year) I still came out better with the high deductible plan.

 

The only think I'd do differently next year is to put more up front into the HSA, since it rolls over anyway. I also have some money in a limited purpose FSA (for dental and vision) and I'm looking for ways to spend it. Next year I'll put less in that and more in the HSA....enough to cover the entire deductible. If I don't use it, I'll just not contribute again to that account (or, contribute less) the following year.

[RoughCollie]

Have I got this right?

 

With the HD plan, your maximum costs would be $10,400 a year:

 

1200 for insurance

+6400 max out of pocket

+4200 prescriptions

-1400 employer contribution

 

With the PPO plan, your max costs would be $7,735 a year:

 

2015 for insurance

+5000 max out of pocket

+720 prescriptions

 

Assuming I understood this correctly and that I liked the doctors associated with the plan, I would choose the PPO plan. This is solely because with the medical expenses of my family, I know we would be likely to hit the max out of pocket.

 

In our family, we have a variety of health plans, which cost us $1400 a month. We are self-employed. We have high deductibles, and prescriptions cost either $10 or $50. Three of the kids are on Chip, which includes routine dental ($700/mo), one is one medicaid ($0), I am on the state's pre-existing condition plan ($300), and DH has Blue Cross ($400).

Edited August 21, 2012 by RoughCollie

[LizzyBee]

I have a high deductible plan with an HSA, and it's my favorite insurance plan ever.

 

With the high deductible plan, are your prescriptions included in the deductible? That's how ours is set up; there is no separate copay or deductible for prescriptions. I meet my max in the first month, so I pay nothing the rest the year. The remaining family members have only $1300 additional deductible to meet; with four of them, it's almost a given that we will meet the family max. Downside is the monthly premiums for family coverage are high ($1,044/mo for family, company pays for mine).

Edited August 21, 2012 by LizzyBee

[cjzimmer1]

My husband's company offered a HD plan, I wish it looked nearly as good as yours. Ours would have been $600 a month, we cover everything up to $2500 (however, there are co-pays on doctors visits and prescriptions and those amounts DON"T count toward the deductible) Up to $7500 they pay 20% we pay 80%, Up to $10000 it's 50/50, then it goes to they pay 80 we pay 20 till we hit our deductible of the year of $14,000 (and remember co-pays don't count towards that!) when they finally cover at 100%

 

So our yearly cost could be $7200 (yearly cost) plus $14000 deductible, plus co-pays. So we were talking out of pocket expenses could exceed $21000 per year. We found insurance elsewhere.

 

 

As far as yours goes, I wouldn't be afraid of HD plan if it was reasonable and yours sounds like it was. For me the biggest issue would be what doctors would accept the plan/could I see the doctors I want. Especially if you have a list of specialists familiar with you, it's harder ot up and switch doctors than if you only have a GP that you see.

[sbgrace]

Have I got this right?

 

With the HD plan, your maximum costs would be $10,400 a year:

 

1200 for insurance

+6400 max out of pocket

+4200 prescriptions

-1400 employer contribution

 

With the PPO plan, your max costs would be $7,735 a year:

 

2015 for insurance

+5000 max out of pocket

+720 prescriptions

 

Assuming I understood this correctly and that I liked the doctors associated with the plan, I would choose the PPO plan. This is solely because with the medical expenses of my family, I know we would be likely to hit the max out of pocket.

 

In our family, we have a variety of health plans, which cost us $1400 a month. We are self-employed. We have high deductibles, and prescriptions cost either $10 or $50. Three of the kids are on Chip, which includes routine dental ($700/mo), one is one medicaid ($0), I am on the state's pre-existing condition plan ($300), and DH has Blue Cross ($400).

 

I'm assuming her max out of pocket includes those prescriptions and the prescriptions also count toward the deductible. That's how ours works anyway. If I'm correct she'll meet her deductible easily with prescriptions alone. Even if she does reach out of pocket maximums it will come out better with the high deductible...assuming those prescriptions do count.

Edited August 21, 2012 by sbgrace

[abacus2]

HSA looks better to me. My husband just changed jobs and we choose his HD option. His options were even more strongly in favor of HSA/HD plan. I love that the HSA carries over; I also read that if you build up HSA funds, they will be accessible as retirement money in the future. For my RXs, the insurance discount is about as good as having co-pays anyway. My HD plan actually has a few prescriptions that they classify as preventative that they pay for on a co-pay basis.

[GWOB]

We have a high deductible plan with a HSA and love it! DH's employers matches our HSA contributions up to $750/year. We pay around $170/month for a family of 5 with a family deductible of $2400/year. All of our preventative health appointments are covered (yearly check-ups, 2 dental cleanings/year). We have no major health issues that require frequent visits. No one is on prescription medication (which are not covered, but counts toward the deductible). We came from Tricare (military healthcare) where everything was covered. I could not be happier. We just make sure our yearly contributions equal the amount of our deductible. We never use the whole amount since we are mostly healthy.

 

The One thing I noticed about the HD plan is that we are less likely to go to the doctor. Even though we just pay out of our HSA, getting a bill for a $135 doctor visit makes you more likely to seek out natural remedies, eat right, and exercise.

 

For a family your size, I would highly recommend the HD/HSA plan.

[Mommyof4ks]

We have a high ded. LAN, and it works out very well for us now with few medical bills, but it worked out even better when my son had cancer. We discovered the hard way that copays never end, so if someone ends up needing to see a specialist several times a week for months and weekly or biweekly for years those copy's will be very high.

 

The HD plan still gives you the negotiated rates, so you are not paying a crY high amount for stuff. We also discovered that different clinics and hospitals can charge vastly different prices for the same tests, so look around for the best price in network, and with the negotiated rate it will be fairly inexpensive.

[LucyStoner]

Depends on if 'scripts are factored towards the deductible and oop max. If they are, HD is great. If not, ppo. I have seen it work both ways, so double check.

[Wendi]

It's funny you should post this tonight; we just got something in the mail from dh's employer letting us know that they will be offering a high-deductible option next year. No word on them chipping in some $$ for the HSA, though. However, the deductible, etc., was pretty similar to what you're talking about. I think the family deductible is $2250 and the max out of pocket is $5000. Something like that. The plan pays 85% after the deductible. Our current insurance is a little over $200/month, which I know is a good deal. We currently pay $70/mo. for prescription copays; without insurance that would be a couple hundred bucks, though. So a high-deductible may not be as good of a deal for us as it would be for those who don't have ongoing health issues already. He'll be getting more info next month, so we'll see.

 

Wendi

[zimom]

Renee,

I have a HSA with a $5000 deductible before it kicks in. One thing I was not clear on was your $350 prescription cost. Is that your OOP or what the insurance will cover? The reason I ask is that one thing I found is that we come out MUCH better purchasing our maintenance prescrptions through Costco, straight OOP, not utilizing insurance at all. They have their own cost savings program for anyone paying cash/not utilizing insurance. One of my maintenance meds is approximately $440 a month, generic at Walmart, less then $14 a month at Costco cash :) (and yes this was after calling around to check various prices). I don't believe their savings is as good for non-generics but I could be wrong, but definately something to look into if you have a Costco nearby and if you choose a HSA. We are still new to the HSA so I think I can even reimburse myself through my HSA checking account for the presciption costs, I just can't directly pay Costco from the account.

[Renee in NC]

I have a high deductible plan with an HSA, and it's my favorite insurance plan ever.

 

With the high deductible plan, are your prescriptions included in the deductible? That's how ours is set up; there is no separate copay or deductible for prescriptions. I meet my max in the first month, so I pay nothing the rest the year. The remaining family members have only $1300 additional deductible to meet; with four of them, it's almost a given that we will meet the family max. Downside is the monthly premiums for family coverage are high ($1,044/mo for family, company pays for mine).

 

Yes, prescriptions are included in the max. out of pocket costs.

[Renee in NC]

Renee,

I have a HSA with a $5000 deductible before it kicks in. One thing I was not clear on was your $350 prescription cost. Is that your OOP or what the insurance will cover? The reason I ask is that one thing I found is that we come out MUCH better purchasing our maintenance prescrptions through Costco, straight OOP, not utilizing insurance at all. They have their own cost savings program for anyone paying cash/not utilizing insurance. One of my maintenance meds is approximately $440 a month, generic at Walmart, less then $14 a month at Costco cash :) (and yes this was after calling around to check various prices). I don't believe their savings is as good for non-generics but I could be wrong, but definately something to look into if you have a Costco nearby and if you choose a HSA. We are still new to the HSA so I think I can even reimburse myself through my HSA checking account for the presciption costs, I just can't directly pay Costco from the account.

 

Why can't you pay Costco from your HSA? Just curious.

 

One of our prescriptions is generic and the other is not (and there is no generic.)

[Renee in NC]

Have I got this right?

 

With the HD plan, your maximum costs would be $10,400 a year:

 

1200 for insurance

+6400 max out of pocket

+4200 prescriptions

-1400 employer contribution

 

With the PPO plan, your max costs would be $7,735 a year:

 

2015 for insurance

+5000 max out of pocket

+720 prescriptions

 

Assuming I understood this correctly and that I liked the doctors associated with the plan, I would choose the PPO plan. This is solely because with the medical expenses of my family, I know we would be likely to hit the max out of pocket.

 

In our family, we have a variety of health plans, which cost us $1400 a month. We are self-employed. We have high deductibles, and prescriptions cost either $10 or $50. Three of the kids are on Chip, which includes routine dental ($700/mo), one is one medicaid ($0), I am on the state's pre-existing condition plan ($300), and DH has Blue Cross ($400).

 

No, the prescriptions count towards the deductible, and once we hit that, the insurance will pay 80%. So, our prescription costs would be a lot less than what you calculated AND it would be part of our OOP, not in addition to.

 

The prescriptions would be $1800 for the year, and the max OOP would still be the $6400, so our costs would be:

 

$1200 premiums

$6400 OOP

($1400) empoyer contrib.

 

$6200 in a worse case scenario. We generally don't spend that much, especially since preventative care is covered at 100% no deductible. We've had 2 sick visits in the past year.

 

I would work towards keeping $6400 in our HSA, and adding what we need to in order to stay at that level.

 

I need to find out if that $1400 is EVERY year, or just the first.

[zimom]

Why can't you pay Costco from your HSA? Just curious.

 

One of our prescriptions is generic and the other is not (and there is no generic.)

I COULD but then I would not be eligible for their cost savings prescription plan Costco offers. In the end, it made much more sense for me to pay $13 for a prescription OOP versus have them charge $440 to the insurance company for the same exact medication.

 

 

If you are on a med that has no generic, this is not going to work for you. But for me it does, plus I'm doing my part to help reduce costs (although I realize I tend to be in the minority there).