The time is quickly approaching for me to enroll in my healthcare for next year, and it seems I am facing a pretty big decision in whether I should go with the PPO health plan or the high deductible health plan with the HSA. When I first started working last year I was somewhat uninformed on the differences between the two plans and just went with the standard PPO plan. After doing some more research this year’s decision looks like it will be a much tougher decision. Both of the plans have their benefits and drawbacks, but there’s always the what-if scenario with each plan. I guess that would be the reason why it’s called insurance though.
As I said before, I am currently enrolled in the PPO plan through my company. I was very unsure of the HSA plan and looking back it probably would have been the better option at the time. My company contributed $500 to your HSA, and the deductible was only $2,000 which was actually a pretty awesome deal – and I probably would have already had $1,200 or so in my HSA account from the $500 employer contribution plus my own contributions. I didn’t really understand how the HSA plan worked last year, I just saw the higher deductible and high out of pocket costs and stuck with the safe PPO plan. That’s in the past so I can’t really change that so now I have to analyze it from this year’s perspective.
I came into this year’s decision better informed and thought I was going to easily choose the HSA plan, but then my company announced some changes to both the PPO and the HSA plan. They are taking away the $500 employer contribution and the deductible increased to $2,500 and the max out of pocket cost has now increased to $5,000. The coverage after you reach your deductible has also dropped from the 80% it was at last year to 75%. So they have created a triple threat of negative things for this plan.
The cost for the HSA is $65 a month and the cost for the PPO is $126 a month, so over the course of the year the HSA would cost $780 and the PPO would cost $1,512 over the full year so I’d save $732 when choosing the HSA. I would take that savings and instead just contribute that directly into my HSA account with that. The only problem is that I’d still have a pretty large gap in coverage for the 1st year of my HSA plan. With the deductible being $2,500 and only having around $700 in my account the potential is still there for me to spend a lot of money out of pocket which I’m not sure I’m ready to do. But then there’s the thought that if I don’t have to spend that this year I will already have the $700+ in my HSA and just keep increasing that amount down the line. The lack of the $500 employer contribution has really put me in a bind here.
For some reason, I usually seem to come down with some sort of bacterial infection at least once a year that requires an antibiotic. Other than that, I’m in good health. If that was my only visit to the doctor each year or if I ended up going a year of not having to go to the doctor at all, I would definitely come out ahead. But what happens if I broke my leg or something like that? I have the money to cover the costs – but then I really should have just went with the PPO instead. It’s that doubt that is making me lean towards the PPO, but I know that if something like that didn’t happen I would easily come out ahead with the HSA as that now becomes MY money. I’ve created a little chart showing what the hypothetical costs would be on both plans right below:
| PPO | HSA | |
| Yearly Cost | $ 1,512.00 | $ 780.00 |
| HSA Contribution | $ – | $ 600.00 |
| Doctor’s Visit (Sick) | $ 25.00 | $ 150.00 |
| Prescription | $ 10.00 | $ 20.00 |
| Total Cost | $ 1,547.00 | $ 1,550.00 |
| Remaining HSA | $ – | $ 430.00 |
These are just estimations on the sick visit to the doctor’s office as well as just a generic prescription for the HSA, while the costs are fixed for the PPO plan. Obviously in this case I come out ahead with the HSA and I can hopefully build on that the next year, getting even closer to my deductible costs. Even if I ended up having to visit the doctor twice I would still come out ahead. In this case I would technically be “throwing away” money towards the PPO, though the peace of mind and better coverage is why it’s not actually throwing money away. In the case where I broke a bone or had to have something more complicated done, the HSA would either be wiped out or I’d have to draw from my own funds. In that case the $1,500 spent on the PPO would absolutely be worth it.
What plan do you think I should go with? What kind of health insurance do you have, and how much does it cost for you?
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