DH had a new job - yay! But it means choosing new health insurance which will be very different from our prior HMO plan. And the benefits paperwork isn’t very clear on answering the questions we have. Options are a PPO with a flexible spending account or two high deductible plans with health savings accounts. One has an embedded deductible and the other has an aggregate deductible. All family plans as we’re still covering DD even though she is overseas this year and covered by a national health insurance plan. DS come off our plan on 1/1 due to his 26th birthday in December.
I think the biggest question we have is what is the individual deductible under each plan. DH sees a number of doctors and specialists ($50 copay under the PPO plan) and is on a variety of medications. So he will likely incur the majority of our costs. While we would max out what we can contribute to the health savings account, it could be that we end up trying to pay more out of pocket and letting the account accumulate for the future. Although he hopes to retire at 66 in about 5 years.
Any of you very sage people have any suggestions of questions we should be asking to make this decision? Or which way you think we should go given his medical history? Thanks!
Check to bottom line, just the way you did when you were looking at college financial aid packages. What will it cost in total … monthly charge, OOP max, any company contribution to the HSA. Only you will be able to determine what is best, based on what you “think” you’ll spend during the year.
FWIW, we have been very pleased since being moved to an HDHP. The first couple years, we had to reimburse ourselves for our OOP costs from the HSA. We found that the cost was less than we would have paid with the other option - which is good, because the company eventually dropped the non-HDHP plans. We eventually were able to pay the OOP without reimbursing ourselves, and we now have a really nice savings account that will assist us with our health care costs in retirement (which is happening VERY soon, due to H’s company suddenly offering a buyout to encourage early retirement).
I am guessing embedded deductible is a per-person deductible, with the cost-sharing only kicking in for that person when that person reaches the individual deductible. The aggregate deductible would be a deductible that kicks in as long as the family spending reaches the deductible - so a combination of people can make the deductible “met” for all.
You probably have to run the specific numbers on each plan based on:
A. Minimum usage.
B. Expected usage.
C. High usage.
You will need the specific numbers (deductible, co-payment, out-of-pocket maximum) for each plan, and what you and your family used in medical services and their costs (though the negotiated pricing may differ for different plans).
Also, consider whether your current providers are in-network in the new plan, or if your new plan’s network contains providers that you want to switch to (if you are not that satisfied with your current providers).
I would confirm this with your benefits people, but I would go with the high deductible hsa plan with the embedded deductible. Based on DH’s use, he could hit his deductible first and start on the co-insurance sooner that the aggregate deductible plan would allow. If everyone else stays away from the Dr. you’ll be ahead. Good luck.
Consider also the FSA vs the HSA. An FSA is “use it or lose it” within the plan year. So you have to calculate how much you think you’ll need to cover the deductible, meds, and copays. But you can get reimbursed from the FSA before it’s fully funded. Example: You’ve put $100 in the FSA. You then incur bills of $300. You can get the $300 reimbursed from the FSA.
The HSA can carry over from year to year, and you can even take it with you when you leave the job or retire. You can also change your contributions during the year, so if you think you’ll need more, you can increase your contribution. So the calculations are easier. However, you can only be reimbursed from the funds that are already in the HSA. Using the previous example, you would get reimbursed immediately only for the $100. You’ll have to wait until there are $300 in the HSA before you can get reimbursed for the entire amount.
Thanks all for your input! @kelsmom is correct as far as I understand it - embedded deductible is amount one person needs to hit. My confusion is that’s the way I thought deductible insurance usually worked anyway. We’ve had an HMO or PPO for decades so change is hard. And we have no good idea of how much doctors visits cost, especially specialists!
@VeryHappy - no company contribution to either FSA or HSA. And the limit of our contribution to FSA is much lower than to HSA.
We’re leaning to the one with the embedded deductible. And he just got next years open enrollment info and both HD plans now are embedded. Just a question for next year of the level of the deductible.
If I were you, I’d go with one of the high deductible plans with the HSA. Presumably the monthly contributions you need to make are much lower than in the PPO, so you can easily funnel those savings into the HSA. You’ll need to get over the mental barrier of the high deductible being a disincentive to your seeking medical care. On average, you should come out ahead with the high deductible plan.
Also, eligible expenses carry over from year to year, at least if you submit your request by the deadlines.
We use an HSA and a limited FSA with a high deductible plan. I submit all expenses as occurred and the reimbursements are processed as funds are added to the account. Since we have annual expenses that exceed the HSA, we always have pending reimbursement at the end of the year. Not a problem. I’ve been doing this since 2013 and the prior year expenses have always been paid…
I hope that we will be able to build a balance in the HSA once the children are independent.
The last time we had to choose a plan, I set up a spreadsheet that took into consideration monthly premiums, maximum out of pocket, deductibles, best estimate for number and kind of doctor’s visits, for each one in the family, etc. In the end we went with the plan that had the lowest total for premiums and maximum out of pocket. Good thing too, as I had an expensive health issue that ran us up to the maximum OOP in December and then again in January.
I also always consider whether my favorite providers are in network (so far they always have been). I like using the major health insurer in our state, as most providers are used to working with them. They’ve been our insurer throughout our marriage of 3+ decades.
You’ll pay the discounted price negotiated by your insurer. Some will have price guides you can use to find the most cost effective care. Fore example we are able to get an MRI for $500 by using a preferred provider.
In our area, it’s almost impossible to find out beforehand how much you will pay for something - but it’s always less when it’s in-network. Even in-network, though, costs vary. For example, a visit to my doctor costs less than a visit to H’s doctor … both are in-network, but the doctors are not in the same hospital system. H’s company has an online tool that is supposed to help you figure out what a visit would be at a provider, but I have found it to be useless. Transparent pricing is one of the things on my wish-list for insurance, but the insurance fairy doesn’t seem to be listening to me.
How much MDs and other providers are reimbursed seems to depend a lot on how the visit is coded. I used to get allergy shots for 7 years. One MD coded it one way and was reimbursed $xx for each visit—2 or 2x/week and the MD I switched to was reimbursed $yy for each visit.
Similarly, when I see an MD, I always pay my $15 copay but sometimes my visit is coded as a checkup and $100 or so while other times it’s a more thorough evaluation and a higher amount, like $395 or so. Of course it gets discounted by the insurance contract but the amount paid by insurer is higher.
Medical coding is definitely an important skill set in the US.
Even under a more sensible health care system, there needs to be some level of tracking in terms of what is being done at what cost. However, it could be that the medical coding classifications may be less complex under some other possible health care systems, with reduced opportunities and incentives to game or cheat the system or make honest mistakes as described in reply #14 (different physicians using different codes for the same procedures).
In the current system we have, it is an invaluable asset to practices trying to pay their bills and get reimbursed. Yes, more uniform reimbursement for providers could be very helpful and yes, I don’t believe coding techniques “add value to society,” but do look at my benefits statements and notice these glaring differences.
Good luck.