Help!!! Do You Think Families Benefit From HDHP/HSA Plans?

It’s open enrollment time in a couple of weeks.  We got notification that our plans and premiums aren’t changing at all for 2012.  No increases in premiums, and they’re actually lowering co-pays and out-of-pocket maximums.  This is way against the trend of what most people are seeing, but keep in mind that they raised premiums on average of 30% last year and doubled co-pays, and I think the backlash was severe enough that they realized another increase might incite a revolt.

We briefly considered the High Deductible (HDHP) plan for 2011, but we ended up going with a traditional plan due to the fact that we knew we were having a baby and would require the use of quite a bit of insurance.  The estimates I ran last year showed that the potential savings of using the HDHP was only a couple of hundred dollars, where if anything went wrong, the risk was a lot higher.

Since we’re not planning on any babies in 2012 and since the four of us are relatively healthy, a ‘standard’ year of healthcare costs could save us quite a bit of money by switching to the HDHP.

I looked at what we’ve typically done in terms of doctor visits and prescriptions to estimate what our costs would be.

The HDHP plan costs about $3,600 less in premiums than the traditional plan.  The first $3,750 of an HDHP plan is paid out of pocket, after which 80% is paid by the plan and 20% is required out of pocket.  A ‘normal’ year (averaging routine visits and such for 2009-2011) would have resulted in costs between $1,000 and $2,000.  So, if next year was any sort of ‘typical year’, we could save upwards of $2,000.

The downside is that there’s still risk.  Any type of catastrophic event or unexpected sickness that would require a hospital stay would most likely cancel out savings, and could even push us into a costlier situation.  However, the maximum family out of pocket is $6,000 (versus $10,000 in 2011) so that risk is severely limited.

I was curious if any other families used the HDHP/HSA plans, and what your experiences were.  If you don’t know personally, I would love if you could ask around to see what experiences people might have.

It’s a big decision and I know my readers will be able to help provide input.  Thanks very much in advance!

7 thoughts on “Help!!! Do You Think Families Benefit From HDHP/HSA Plans?”

  1. For the most part. HD plans have worked out nicely. However, the thing to consider is what items do not count towards your deductible.

  2. I have a HDHP with an HSA and totally love it. I'm healthy, so I only need health insurance for regular checkups (now covered through Obamacare) and for major catastrophes.

  3. I'm not an expert, but I personally use the lowest premium plan that my employer offers. I haven't been to the doctor in nearly two years (although, now that I am typing this I think i should schedule a routine checkup) so my medical costs are practically nothing. I say if you aren't expecting any major costs, go for the cheapest as long as you are offered in big emergencies.

  4. We ran the numbers both ways – a theoretical 'perfect' year (no injuries or unscheduled trips to medical offices), and a 'catastrophic' year. Because of the way my company sets the premium, we won either way. No brainer on our end.

    What are the copays on the other plan? Does the traditional plan ever move to 90/10 or 80/20? For the HDHP, does it ever go to 100% coverage?

  5. The high deductible plan offered by my husband's employer is actually a much better option for years when we need a lot of coverage – company pays all premiums and after our $3,200 copay everything is covered 100% in network and 80% out of network. Compare this to the "regular" plan offered by my company where we pay $2,400 in premiums, and after a $500 deductible most things are covered at 80% but anything out of network is only covered at 60%. The difference between that 80% and 60% is way more than $300 in a year where we're expecting large expenses like a birth.(The out of network thing is very important, since we want to use a birth center and midwife, which is out of network for both companies.)

    The risk isn't that great since we're able to absorb the entire deductible of the high-risk plan with no problem, and if we use it we get the benefit of a health savings account (where we keep unused money for future years) instead of a flex spending account (annual use it or lose it).

    For standard years, the regular plan is probably a better option if we end up going with in-network care and only need regular check-ups. However, since we can't predict the future, we're happy to take on the risk ourselves.

  6. Although I do not have that option, I contribute to my FSA. If I had a small child, I would hedge a little because children are harder to predict.

  7. Thanks to all for the great advice.

    To answer PKamp3, once the deductible is met, the coverage is 80% in network, 60% out of network. The traditional plan offers 90% in network and 80% out of network, so there's definitely a trade-off in our case.

    It does hit 100% when you've reached the 'family' out-of-pocket max, which would be $6,000.

    Lots to consider, good thing I have a few more weeks to run through more numbers.

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