Health Savings Accounts - Do you like them?

[golfgal]

Originally Posted by shamrock847

They're great if you are not a big consumer of health care services.

And the ability to use the money for other things after age 65 is awesome, especially if you are maxing out your other tax-advantages retirement savings options.

They are great if you are a big consumer as well. You have an out of pocket max and once you are done, you are covered at 100% for the rest of the year. Most co-pay type plans still have co-pay after you have reached your "out of pocket max", including co-pays for medications. With our D last year, that would have amounted to an additional $2000+ above and beyond our out of pocket max...which, for her last year was $3250...

The way most plans are designed it's hard to come up with a situation where a high deductible plan costs more when you include premiums, out of pocket costs and tax savings. I've seen 100's of plans for various companies over the past several years and I can come up with a handful of examples where the HD plan cost someone more overall and mainly that was due to the way the company contributed funds to the HSA.

[jlawrence01]

Originally Posted by oneasterisk

I have an Aetna hdhp and it definitely negotiates the rates.

Yours may have. The plan we had did NOT and we called them on that.

For us it was irrelevant as we max out every year and would have with the discounts.

[shamrock847]

Originally Posted by golfgal

They are great if you are a big consumer as well. You have an out of pocket max and once you are done, you are covered at 100% for the rest of the year. Most co-pay type plans still have co-pay after you have reached your "out of pocket max", including co-pays for medications. With our D last year, that would have amounted to an additional $2000+ above and beyond our out of pocket max...which, for her last year was $3250...

The way most plans are designed it's hard to come up with a situation where a high deductible plan costs more when you include premiums, out of pocket costs and tax savings. I've seen 100's of plans for various companies over the past several years and I can come up with a handful of examples where the HD plan cost someone more overall and mainly that was due to the way the company contributed funds to the HSA.

That's good to hear. Where I've worked the co-pays for the traditional plans stopped once you hit the out of pocket max plus the out of pocket max was always lower for the traditional plan. But even in this case the difference in the worse case scenario wasn't that much for family coverage:
a. $400/mo premium X 12mo + $5000 out of pocket max traditional plan = $9,800
b. $50/mo premium x 12mo + $10000 out of pocket max HDHP= $10,600 ($800 more than plan a. worse case)

If you had some sort of company contribution/match to the HSA then I can see how it would easily tip things in its favor.

From a larger perspective, I think HSAs help reduce wasteful health care spending because many people that would rush to the doctor or ER for something relatively minor when all they have at stake is a $20 co-pay, think twice before going if they are on the hook for $200. Even if that $200 was less than they would have spent on the premium for a traditional plan.

[golfgal]

Originally Posted by shamrock847

That's good to hear. Where I've worked the co-pays for the traditional plans stopped once you hit the out of pocket max plus the out of pocket max was always lower for the traditional plan. But even in this case the difference in the worse case scenario wasn't that much for family coverage:
a. $400/mo premium X 12mo + $5000 out of pocket max traditional plan = $9,800
b. $50/mo premium x 12mo + $10000 out of pocket max HDHP= $10,600 ($800 more than plan a. worse case)

If you had some sort of company contribution/match to the HSA then I can see how it would easily tip things in its favor.

From a larger perspective, I think HSAs help reduce wasteful health care spending because many people that would rush to the doctor or ER for something relatively minor when all they have at stake is a $20 co-pay, think twice before going if they are on the hook for $200. Even if that $200 was less than they would have spent on the premium for a traditional plan.

Perfect example of how the HD plan saves you money--even without an employer contribution. You haven't figured in the tax savings, even at the $5000 OOP to match the copay plan, you are saving $1400ish on taxes running those funds into your HSA. At the $6450 you can put in this year, depending on your tax bracket, example B is now a net of $8800ish--so around $1000 less than A. Most people would see that $10,000 OOP and say forget it without doing the math. I do have to say that is an odd plan design to have such a high OPM compared to the copay plan though. Usually those maxes are the same or closer. In a situation like this you take the extra $350/month you were used to paying and put that into your HSA. In just over 2 years you have 10K in your HSA. Keep contributing to that fund, max it out each year if you can, and in under 2 years you have your 10K and more and never have to worry about coming up with those dollars again.

[oneasterisk]

The reasons I went with an HSA over a traditional plan are:

*Lower monthly premium compared to traditional plans
*HSA is portable - Even if I leave my job, the funds in the HSA are mine and they do not expire
*HSA contributions are tax deductible

I'm a healthy 32yr old who goes to the doctor once or twice a year if that. The plan I have includes two cleanings at my dentist at no cost to me. It does have vision coverage, but I choose to add VSP because I wear contacts/glasses and it's a better deal if I utilize VSP. $104 monthly premium, and of that $62.50 gets added to my HSA. Deductible is $1500 and catastrophic limit is $4000. I have that much in my HSA.

[Sunbather]

We like our HSAs OK. I only contribute $500 a year tho. The company also contributes $500 a year. Whatever I don't use I just let roll-over. I'm not stuffing it like other people are tho.