YouBet said:

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I seriously think that insurance guide was printed in error.

Very perplexing.

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I had the same thought.

I have also never heard the term "buy-up" used to describe any insurance plan, much less an HDHP.

I just realized I didn't see the monthly costs for families that are more than just one single person. Those premiums are really high if you have a spouse and dependents.

I currently pay about $75/month for employee plus one dependent (goes up to about $120 next year). I believe my max OOP is around $9000. Can't exactly remember my deductible, but it's around $3k-$4k. Same BCBS coverage/network as the alternate plan, just a higher deductible in exchange for lower premiums.

Are you purchasing individual or family coverage? Seem to mention both in some posts. If individual, the $750 premium to get access to HSA savings is worth it. You will save that much in taxes if you max out your contributions.

I also think the apples to apples comparison is between the HP3500 and P3000 plans in terms of coverage. The monthly premiums on those for family coverage is much closer in cost. The other plan seems to have potentially limited doctor network and substantially higher risk on total cost if you have any medical event.

BDJ_AG said:

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Are you purchasing individual or family coverage? Seem to mention both in some posts. If individual, the $750 premium to get access to HSA savings is worth it. You will save that much in taxes if you max out your contributions.

I also think the apples to apples comparison is between the HP3500 and P3000 plans in terms of coverage. The monthly premiums on those for family coverage is much closer in cost. The other plan seems to have potentially limited doctor network and substantially higher risk on total cost if you have any medical event.

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yeh I know I mentioned family at some point; I was just comparing costs.
I am employee only.

I'm sure it still makes sense to get hsa, I'm just perturbed that I have to pay money to have access to one.

Have also never seen this "buy-up" term. Whole thing is odd.

Edit: totally spit-balling here....I wonder if "buy-up" means you are buying it all up front because his premiums are so much higher under HSA but then he pays nothing OOP once he hits his deductible. So, in that regard, you paying a premium up front to not pay anything on the backend.

62strat said:

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BDJ_AG said:

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Are you purchasing individual or family coverage? Seem to mention both in some posts. If individual, the $750 premium to get access to HSA savings is worth it. You will save that much in taxes if you max out your contributions.

I also think the apples to apples comparison is between the HP3500 and P3000 plans in terms of coverage. The monthly premiums on those for family coverage is much closer in cost. The other plan seems to have potentially limited doctor network and substantially higher risk on total cost if you have any medical event.

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yeh I know I mentioned family at some point; I was just comparing costs.
I am employee only.

I'm sure it still makes sense to get hsa, I'm just perturbed that I have to pay money to have access to one.

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It's dumb that we can't contribute to one regardless of what insurance you have. It's the best tax advantaged vehicle out there so the government is going to put strings on it because they are thieves. I can no longer contribute to one myself now that I'm not working. Total horse*****

On limited FSA's…if your employer has it setup this way, you 'can' use your FSA funds for Medical/Rx..after you meet your Medical/Rx Deductible.

Contact your FSA admin to confirm and to explain the process, usually pretty simple form to validate date you met your deductible in your plan year.

Hoyt Ag said:

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I'm 42 and have never contributed to an HSA, I feel so far behind in this space. I am starting to contribute to it this year after our company finally offering it. I have saved well in all other areas of life, but this one. Lessons learned I guess.

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Never too late. I started 4 years ago at 47 and it's up to $28k on VOO and a blue chip growth fund (single, not family cap)

I love the HSA. Wish I'd never spent anything out of mine but one so has had a couple surgeries and my wife gets expensive infusions from her rheum.

Someone convince me HSA is a good option for us. I've run the numbers, but each time I do, the only way to make this work is to dip into the HSA funds to pay, which sort of defeats the purpose, right?

We have 3 young kids (8,7,2) and my wife currently stays at home. After getting 401k match and maxing Roth, things are pretty tight as is. Difficult to pay with other monies at the moment, because the premiums aren't significantly different.

Over the last 24 months, we've taken a kid to a doctor over 60 times. The 2 youngest dealt with viral-induced pneumonia that lasted 8 months. The oldest has allergies and is likely to start the injections soon.

Everything for the HSA is 20% after the deductible. My company contributes $1,000 to HSA.

Preventive is 100% covered for both

Annual premium

• Standard - $7,140
• HSA - $5,820

Decutible (individual/family)

• Standard - $2,800 / $5,600
• HSA - $3,300 / $6,600

Primary care / Specialist -

• Standard - $40 / $65
• HSA - 20% after deductible

ER / UC -

• Standard - $350 / $100
• HSA - 20% after deductible

P.H. Dexippus said:

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permabull said:

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I have been on HDHP for about a decade now and maxed out the HSA and never made a withdrawal. It's invested 90% VTI and 10% VXUS and has grown to a balance of $130k. I have about $15k in receipts on deck if I ever want to make a tax free withdrawal but I don't plan on using any time soon. I believe our family max out of pocket is $9k so if we have something major happen we have enough to pay the max out of of pocket from the HSA for multiple years, or we could switch to a different plan if it makes sense for us.

We are very happy we switched to HSA when we did.

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Well done. We've got $120k in our HSA but I started 20 years ago the first year the program became available. I was way too conservative and basically kept it in cash for the first decade and actually paid medical expenses out of it until 2010. I also didn't make a concerted effort to save bills & receipts until seven years ago. Not bad, but I should have more than 2x in the account and 2x receipts at this point had I approached it with the correct philosophy.

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You are smarter than me. We have a little over $100k but I've never saved any bills or receipts. Now, I could get a lot of them out of apps and likely request receipts for some things, but I've never actively saved anything. I never intended to actually use it.

However, now that I'm early retired my thought process has changed some and I'll be saving receipts here forward just in case. Medical insurance when you are too young for Medicare and do not have a corporate plan to rely on is a different ballgame.

I'm rationalizing the previous two decades of neglect as we easily covered any OOP health expense at the time from paycheck cash flow, so I'm not going to worry about it. That $100k is now a security blanket for any healthcare emergencies that may pop up between now and me turning 65.

Premium and deductible seem like basically a wash in your scenario, but if you are going to the doctor that many times and generally have a lot of recurring health issues with your kids then the PPO is likely the better option if you are having to hit the Primary Care and ER/UC buckets a lot.

Thanks. Yeah, they go to the pediatrician and specialist quite a bit. Once that slows down, I may switch to HSA.

If it were just me, the HSA premium would be $0. Damn kids....LOL

AgsMyDude said:

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Someone convince me HSA is a good option for us. I've run the numbers, but each time I do, the only way to make this work is to dip into the HSA funds to pay, which sort of defeats the purpose, right?

We have 3 young kids (8,7,2) and my wife currently stays at home. After getting 401k match and maxing Roth, things are pretty tight as is. Difficult to pay with other monies at the moment, because the premiums aren't significantly different.

Over the last 24 months, we've taken a kid to a doctor over 60 times. The 2 youngest dealt with viral-induced pneumonia that lasted 8 months. The oldest has allergies and is likely to start the injections soon.

Everything for the HSA is 20% after the deductible. My company contributes $1,000 to HSA.

Preventive is 100% covered for both

Annual premium

• Standard - $7,140
• HSA - $5,820

Decutible (individual/family)

• Standard - $2,800 / $5,600
• HSA - $3,300 / $6,600

Primary care / Specialist -

• Standard - $40 / $65
• HSA - 20% after deductible

ER / UC -

• Standard - $350 / $100
• HSA - 20% after deductible

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It's all about the HSA as a retirement vehicle. In your case, the HSA provides you quadruple financial benefits over the non-HSA plans: (1) The $1000 contribution from your employer; (2) contributions are tax-deductible; (3) growth is tax-free; and (4) withdrawals are tax-free for medical expenses from any year (save your bills & receipts).

I understand your budget is tight. Setting aside the HSA, the tradeoff between higher premium vs. higher deductible is about a wash. The 20% copay is steep. You should look at your out of pocket maximum under each plan since on a terrible health year, that's your max exposure. Only you know what works best for your family, but I would give long pause before walking past the long-term benefits of compounded tax-free growth on the HSA.

AgsMyDude said:

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Thanks. Yeah, they go to the pediatrician and specialist quite a bit. Once that slows down, I may switch to HSA.

If it were just me, the HSA premium would be $0. Damn kids....LOL

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One thing you can do is go look at the EOBs for those visits last year.

If you switch to an HDHP, you should only have to pay the same negotiated rate that the insurance pays.

So, if insurance pays $120 for a drs visit, that's what you would pay under the HDHP.

You could at least get some numbers to compare/estimate your OOP costs under the HDHP using that info.

Also check prescription drug coverage. Ours under the HDHP is different, resulting in higher OOP costs for prescriptions, if you aren't taking "basic" preventative meds.

Also, if money is tight and you can't contribute to the HSA, idk if it's really worth it. Even if your employer puts in $1000, if you'd hold back contributing to the HSA to cover the higher OOP costs, there is really no benefit.

The HDHP becomes a powerful savings vehicle when you 1) maximize tax savings and 2) accumulate enough to invest the funds.

If it only ever has a few thousand dollars in it because you can't afford to contribute, then it may not be worth it.

The reduced premium and a solid employer contribution go a long way in the math of ppo vs hdhp. In a lot cases, even with the utilization, the cost is the same or favors hdhp. The actual deductible and max out of pocket are key. We have some guys at work that built a model to compate the plans and hdhp is a winner for us.

That's weird. At my employer, Surest is the most expensive plan. The coverage costs for things like ER are a little lower, but overall it has been nice. If it is truly $0 I would download the surest app and get the trial code from your employer to see what the copays are for your version of the plan. I know my version of it has $500 copay for any ER visit and $100 for any urgent care.
For example, for my wife who is pregnant, all pre-natal care up through the birth is a total Copay of $750 to be paid at time of delivery if we go to a pre-set hospital (which is easy, since its the hospital her OBGYN works through). We haven't paid a dime in the 6+ visits she's taken to the OBG this year.
But I pay for it in the premiums. If yours is $0 I would look and see if the coverage works for you.

Once we have the kids and they get a bit older, I might look into the HSA plan since I know it's a better saving tool.

P.H. Dexippus said:

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permabull said:

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I have been on HDHP for about a decade now and maxed out the HSA and never made a withdrawal. It's invested 90% VTI and 10% VXUS and has grown to a balance of $130k. I have about $15k in receipts on deck if I ever want to make a tax free withdrawal but I don't plan on using any time soon. I believe our family max out of pocket is $9k so if we have something major happen we have enough to pay the max out of of pocket from the HSA for multiple years, or we could switch to a different plan if it makes sense for us.

We are very happy we switched to HSA when we did.

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Well done. We've got $120k in our HSA but I started 20 years ago the first year the program became available. I was way too conservative and basically kept it in cash for the first decade and actually paid medical expenses out of it until 2010. I also didn't make a concerted effort to save bills & receipts until seven years ago. Not bad, but I should have more than 2x in the account and 2x receipts at this point had I approached it with the correct philosophy.

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Not having receipts isn't the end of the world. Once you are on Medicare you can reimburse those premiums from your HSA so you will have eligible expenses in the future even if you never expensive medical bills