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What else should I think about when choosing HDHP vs. traditional insurance?

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I'm based in the US and buy employer-sponsored health insurance that covers me and my spouse. We're about to have our first child; I have been evaluating our options for health insurance for 2018 and am trying to run the numbers on whether a "normal" health plan or an HDHP are better. 

It seems like the costs of healthcare assuming we use the plan heavily are almost identical; what am I missing?

The plan options look roughly like:

(1) "Traditional" plan - $6500 annual premiums - for in-network care, $25 copay for primary care and $150 copay for hospital visits. No deductible, $4000 out of pocket maximum annual costs. Out of network coverage is terrible.

(2) "High deductible" plan - $3300 annual premiums - for in-network care, $5500 family deductible, after which $0 copay for all care. Employer contributes $2100 to an HSA (we would contribute the remaining maximum contribution, an additional $4650.) Out of network coverage is terrible.

It seems like under plan (1) we pay $6500 in pre-tax money and about $0 extra for copays. (Could add up if we consume a lot of non-preventive care.)

It seems like under plan (2) we pay $7950 in pre-tax money between premiums and HSA contributions. And it seems like if we assume we spend the entire deductible but have no other costs, we use most of our HSA, but still have about $1250 left over in HSA savings which can pay for future health care expenses.

As far as I can tell we do not want to make this change in mid-2017 when the child arrives because the HDHP will probably not pro-rate the deductible when we join mid-year. (I need to double check this.)

Co-pays for prescription drugs are similar in both plans.

For 2018, overall it seems like the net cost of the HSA is almost exactly the same as the non-HSA plan. It seems really really tempting. What am I forgetting to think about here?

The specific insurer is generally well-accepted in our area and we live in an area surrounded by lots of physicians -- it's really easy to find an in-network provider under normal circumstances.

We are generally healthy now but have no idea what the future will hold.

Pros of the HDHP:
* If we DO fully spend the deductible, I think our costs are about $200 higher. But we saved more than $200 in taxes by deferring an extra $1450 of income on pretax expenses (premiums and HSA contributions).
* If we DON'T fully spend the deductible, we can just park our HSA in a savings account like the Connexus 1.5% APY HSA and let it grow tax-free. Better to have that money available to spend on future health care expenses than to have sunk it into premiums and have nothing at the end of the year.
* Even if we DO fully spend the deductible, we can choose to pay for those expenses out-of-pocket from taxable money. We can keep our HSA with a bank who lets us invest it in the market, park it in the S&P 500 until we retire, let it grow tax free, and eventually use the funds to reimburse healthcare expenses as part of a retirement strategy.

Cons of the HDHP:
* I have genuinely no idea how much health care an infant child requires and how much of it is preventive (free in all plans) vs. emergent (are we going to rush the kid to the ER whenever something seems amiss? how often does this happen?), so I may have forecasted our total costs incorrectly.
* I read this somewhat worrying article that says that parents with HDHPs are less likely to seek treatment during the early part of the year when they haven't hit their deductible yet: https://insight.athenahealth.com/high-deductible-health-plans-bad-idea-kids . I'm concerned that there might be a psychological effect which, even if I know about it, increases the risk that I will delay seeking medically necessary care. (Then again, proponents of the HDHP say that it is intentional that it makes people think twice before consuming healthcare.)
* I'm worried that there might be some other angle we're missing -- something seems too good to be true here.

What else should we think about when trying to make this decision?

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Very good points about child delivery. My hospital bill was over $7k after network discounts (fortunately I did not have... (more)

Shandril (Apr. 28, 2017 @ 3:37p) |

One data point on an HDHP: my son was born at an in network hospital and my wife had an epidural. There were a couple n... (more)

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Based on the choices described by OP, I think the HDHP is the best deal in an ordinary year when you don't plan any majo... (more)

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You're looking at it wrong.

Under plan 1 you spend a minimum of $6500 in premiums. If you go to the doctor, you spend more in copays. You said you have a kid on the way, so there will be a bunch of doctor visits, checkups & such.

Under plan 2 you spend a minimum of $3300 in copays. The $5500 deductible is offset by the $2100 hsa contribution, so your max in network costs would be 3300+5500-2100 = $6700. Then no more copays.

Plan 2 looks better to me, assuming the same in network coverage.

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Make sure to understand the tax implications as that is usually the primary benefit of using an HSA. For example, you can defer $6750 which results in a tax saving much higher than the $200 you mentioned when you eventually use that money (in old age). And also many employers provide "seed money" to HSA accounts but you did not mention this.

There's a calculator in the middle of this blog post that I found very useful:

https://thefinancebuff.com/hmo-ppo-vs-high-deductible-hdhp-hsa.html 

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One other thought - you mentioned the psychological effect of the high deductible on your desire to visit the doctor.

My advice is don't worry about it. Think of it like this: assume you will spend the entire deductible anyways. If you need to do that $300 doctor visit, no worries, you've already planned to spend the money so it should be in your budget. At the end of the year, if you haven't spent your entire deductible, consider that a bonus.


Also, I re-read that this will be your FIRST child. So are you really on a "family" plan now, or are you on an employee+spouse plan? Will either the premiums or deductibles increase once the child is born?

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One thing to keep in mind is the fact that your employer has contributed a significant sum to your HSA kind of counteracts the chilling feeling of spending your HSA when no where near your deductible limit. At least that is how I look at it. I have used mine a few times and I never got to spending my own money yet.

Having a kid will certainly take you to the deductible limit. I would double check with your insurance company themselves and your HR person and double check that this works like you are imagining it and that there aren't hidden (poorly explained) factors that may throw a wrench in this calculation. If you really don't have to pay anything after the limit, which is also how I understand an HDHP to work, then it is for sure your preferable option.

As a single person with no ongoing health issues I took it knowing that any health issue I was likely to experience would either be pretty minimal or max me out in which case I would come out ahead vs. spending on monthly payments for a service I may not use the whole year. The only thing I was worried about was, what if in the first year I had that situation, before enough money was in my HSA to cover it. Luckily that didn't happen and I realized that most medical payments are pretty long term with payments having at least 90 days to pay and many hospital willing to work on payment programs. That's probably not always true but it often is.

That Athena health article seems like scare tactics to my mind.

The line "There is evidence that people — especially those with lower incomes — are choosing not to get needed care for their children early in the year, when they are still liable for those high-deductible payments" seems highly suspicious as it doesn't make logical sense. The deductible is the same all year and you only hit it by using health services.

The kind of people w/ income that this would effect would be in the same situation either way as they just don't have enough money for health care when it really comes down to it. Co-pays and monthly premiums would be just as detrimental to these people short term as spending the money in their account if money is truly that tight. The only way I can see this making sense is if you had the bad luck of year after year spending under the deductible limit but over the contributions of employer and themselves. But if you are paying the high cost of monthly insurance payments this is already a problem as I imagine for family coverage this is hundreds of $$$.

I would end with, when I looked at both options I couldn't understand how if HDHPs work the way they do, how are they are not better for most people considering the max deductible for HDHPs are lower than the annual premium cost of normal plans. I feel like there must be a hidden catch but every question I asked only re-affirmed me in my initial thought. Thus also why I think that Athena health article is kind sketchy scare tactics so everyone doesn't flee from more lucrative standard plans.

I may be missing something as like I said I haven't had to use my plan too much but I did ask very skeptical questions as did a number of my co-workers who were also thinking the same as me. HDHPs seem a bit too good to be true, but I couldn't poke any holes in my plan at least.

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sfchris said:   Make sure to understand the tax implications as that is usually the primary benefit of using an HSA. For example, you can defer $6750 which results in a tax saving much higher than the $200 you mentioned when you eventually use that money (in old age).
People with HDHP's are eligible for HSA's, while people with non-HDHP's (PPO's, HMO's, etc...) are eligible for FSA's. All HDHP premiums and HSA contributions have the exact same tax benefits (assuming that the HSA is set up through your employer; if not, the premiums will be subject to Social Security and Medicare taxes) as the non-HDHP premiums and FSA contributions.

The HSA's have higher contribution limits than FSA's, but HDHP's, by definition, have higher deductibles that apply to way more healthcare expense categories than PPO's/HMO's, etc... (with a PPO/HMO, the deductible almost never applies to office visits, regardless of the reason, or to prescription drugs; with an HDHP, unless the office visit is entirely preventative, the deductible applies and it also typically applies to all prescription drugs), which means that your out of pocket costs are also much higher with an HDHP. Hence, the reason that HSA's have higher contribution limits. As a result, the primary distinguishing characteristic of the HSA's is your liability to carry them over year to year, while the FSA's are use it to lose it (except that with many custodians now, you get to carry forward $500 year to year). In the context of all the healthcare variables, your ability to carry over unused funds is certainly nice but generally isn't a major consideration.

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Sleepthieves said:   I would end with, when I looked at both options I couldn't understand how if HDHPs work the way they do, how are they are not better for most people considering the max deductible for HDHPs are lower than the annual premium cost of normal plans. People need to keep in mind that the HDHP premiums are not inherently cheaper than those of their traditional counterparts (PPO's, etc...). I have come across a number of situations where the HDHP premiums were essentially the same or even higher than the PPO premiums.

It is all about the structure of those plans. You can have an HDHP with a relatively low "high deductible" (for 2017, a health plan is qualified as an HDHP if it, among other things, has an annual deductible of at least $1,300 for self-only coverage or $2,600 for family coverage), a relatively low out of pocket maximum, etc... In other words, an HDHP that provides relatively generous benefits can be just as if not more expensive than a PPO that requires its participants to shoulder a fairly significant portion of the costs/has high out of pocket maximums, etc... By the way, the same is true for many HMO's, which can be just as if not more expensive than many PPO's.

In other words, it's more about the specific structure than the label. Do not automatically be turned off by the HDHP label, but also do not automatically assume that an HDHP is going to end up being cheaper for a healthy person than a PPO.  
  

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Your deductible and max out-of-pocket for the HDHP is exactly the same?

The HDHP with HSA and employer contributions is a no-brainer.

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geo123 said:   
sfchris said:   Make sure to understand the tax implications as that is usually the primary benefit of using an HSA. For example, you can defer $6750 which results in a tax saving much higher than the $200 you mentioned when you eventually use that money (in old age).
People with HDHP's are eligible for HSA's, while people with non-HDHP's (PPO's, HMO's, etc...) are eligible for FSA's. All HDHP premiums and HSA contributions have the exact same tax benefits (assuming that the HSA is set up through your employer; if not, the premiums will be subject to Social Security and Medicare taxes) as the non-HDHP premiums and FSA contributions.

The HSA's have higher contribution limits than FSA's, but HDHP's, by definition, have higher deductibles. Hence, the primary distinguishing characteristic of the HSA's is your liability to carry them over year to year, while the FSA's are use it to lose it (except that with many custodians now, you get to carry forward $500 year to year). In the context of all the healthcare variables, your ability to carry over unused funds is certainly nice but generally isn't a major consideration.

   I disagree strongly on your first point. I never used my FSA when I was on a non-HDHP, because I had no ability to forecast my medical expenses. I was healthy, no kids, and my health expenses ranged from $0 to several hundred in years where I had an injury or ailment.

Now, with an HDHP, I max out my HSA and plan to use it as a retirement savings account to supplement maxed Roth IRAs and 401ks. However, it does hurt when I do get hurt and have to go to a doctor or physical therapist, since it's additional money that I would otherwise not have paid on a different health plan.

Thanks for the thread OP - will be reading this thread closely for any words of wisdom. Best of luck!

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vnuts21 said:   I disagree strongly on your first point. I never used my FSA when I was on a non-HDHP, because I had no ability to forecast my medical expenses. I was healthy, no kids, and my health expenses ranged from $0 to several hundred in years where I had an injury or ailment.

Now, with an HDHP, I max out my HSA and plan to use it as a retirement savings account to supplement maxed Roth IRAs and 401ks. However, it does hurt when I do get hurt and have to go to a doctor or physical therapist, since it's additional money that I would otherwise not have paid on a different health plan.

So, you don't disagree with any of my points, which are factual. All that you are saying is that the ability to carry over your contributions was quite important in your case. Fair enough, although the recently authorized $500 FSA carry over (if offered by the custodian) tends to provide additional flexibility to healthy people, plus a lot of FSA rules have been relaxed, such that many of them now allow you to run things such as blood pressure monitors, massages, etc... through the FSA without a prescription.

I will mention one fairly significant drawback to HDHP's, especially for healthy people: the fact that you are covering the first couple thousand in non-preventative healthcare expenses creates a compelling incentive to avoid medical care, which, in certain situations, can be very dangerous. Sure, if you break your arm, you are going to see a doctor regardless of whether you have an HDHP or a PPO/HMO. There are a lot of very serious and even life threatening medical conditions, however, that do not manifest themselves in very clear ways. For instance, what happens if you get a horrible headache (the worst headache of your life)? It could be that all you have is a really bad headache, or it could be a subarachnoid hemorrhage, a medical emergency with devastating consequences, including death. If you have an HDHP, you are probably going to hesitate much longer before going to the emergency room, knowing that you'll be responsible for $1,000+ in expenses for something that could easily end up amounting to a non-issue. This is especially true for very healthy people for whom this may be the only non-preventative expense of the year.

Like I mentioned above, I have absolutely nothing against HDHP's, which in the right situations can represent the most advantageous (or the only viable) healthcare option, but these are the types of considerations that a lot of people fail to take into account on the front end. 

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OP I debated this very issue (although I had a 1YO at the time) in Dec in a thread here on FW. I have enjoyed the HDHP for the past 4 months.

Babies really only go for their scheduled preventative checkups (1 month, 3 month, 6 month, 1 year). If they're sick, and they will get sick, your doctor will advise you when to come in and when not to. If there's a serious complication with the baby of course then that makes things more complicated.

If you're a first time parent the very first cold your baby gets you'll likely freak out and go to the DR ASAP. Cold #2 you'll probably wait a day and call the Dr. After cold #10 you'll not even bother calling the DR.

Some of the issues brought up in this thread are important. You should not avoid health care because you're on the hook for the majority of it. The good news is that even traditional plans now have pretty high copays for lots of things, so the difference is not $0 to $500. It's more like $40/$50 copay vs $75/$125 total bill from Dr with HDHP.

Also you really need to decide now if you're using the HSA for medical expenses now, or in 20+ years as a retirement vehicle. Doing so now will also make you ready with a secondary source of funds for those medical bills when they come.

Lots of good discussion in the thread. Also I've read on FW multiple times you can be reimbursed from your HSA for medical bills any time after they're incurred. I don't know if this is true, and haven't verified it myself but I have started saving bills for reimbursement in 20+ years. You should consider doing the same.

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Stubtify said:   Some of the issues brought up in this thread are important. You should not avoid health care because you're on the hook for the majority of it. The good news is that even traditional plans now have pretty high copays for lots of things, so the difference is not $0 to $500. It's more like $40/$50 copay vs $75/$125 total bill from Dr with HDHP.
Just to correct something, the OP's Traditional plan co-pay is $25 for primary care and $150 for ER. It sounds like with the OP's Traditional plan, after co-pay the insurance carrier pays everything else (lab charges, facility fees, etc...). If a doctor has to run labs, the difference could easily end up being $25 vs. $400 or $500. With an infant less than 3 months old, a fever above 100.4F typically constitutes an emergency, at which point it'll be $150 vs. $1K+.

If the OP has accurately described his plan, however, then the structure of his HDHP makes it preferable to that of the Traditional, as his worst case scenario under the HDHP is $6,700/year (again, this assumes that the HDHP covers 100% of all in-network charges after he meets the family deductible), but there are also plenty of scenarios that are better than that. With his Traditional plan, his best case scenario has him spending $6,500/year, plus co-pays. The OP will just have to keep in mind that psychologically, if he opts for the HDHP, he will have to consider the full family deductible already spent and not try to avoid healthcare visits to save money.
Also I've read on FW multiple times you can be reimbursed from your HSA for medical bills any time after they're incurred. I don't know if this is true, and haven't verified it myself but I have started saving bills for reimbursement in 20+ years. You should consider doing the same.
It's true, but the advantage of the strategy is the fact that the earnings are tax free. That sounds great, but for a variety of reasons most people's HSA funds are invested conservatively and most HSA participants don't have access to the same low cost investment options that they have in other types of investment vehicles. Further, people lose records and have issues that end up destroying them, not to mention the fact that if in 20 years an HSA custodian requests additional information to process your HSA claim, you'll be out of luck.

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geo123 said:   It's true, but the advantage of the strategy is the fact that the earnings are tax free. That sounds great, but for a variety of reasons most people's HSA funds are invested conservatively and most HSA participants don't have access to the same low cost investment options that they have in other types of investment vehicles. Further, people lose records and have issues that end up destroying them, not to mention the fact that if in 20 years an HSA custodian requests additional information to process your HSA claim, you'll be out of luck.
  
Also Wife could get frustrated with large box titled (RECEIPTS 2017) and throw them out in 2033. 

Great points, thanks for the correction as well.

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A few things from my HSA/HDHP experience:

1. I would look again at the structure of the plan. It seems extremely unusual for the deductible to equal the max out of pocket. In my case, I have the deductible, then I still pay 10% for a while (equaling over $1,000 in additional potential cost). You may have misread it.
2. In my case the prescriptions are part of the general deductible as well. Are they in yours? This opens up some money saving opportunities. Many drugs like dermatologics and epipens and others have coupons. The coupons eat your deductible but don't cost you money. Example, drug has $600 cost, $300 coupon, only $300 out of pocket but $600 deductible consumed. That's $300 of cash savings in your pocket.
3. HDHPs open up opportunities for savings via negotiation. Doctor or provider charges a large amount, will oftentimes provide a discount for speedy payment, cash payment, or if they are overcharging and you complain, or if you lack money and write a letter, but your deductible is still consumed for the full cost.

Assuming your facts are accurate, HSA/HDHP is the clear winner, just don't skimp on needed services.

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I'd like to add that you can still use a limited FSA (for dental and vision expenses only) even when under a HDHP + HSA.

As for OP's question, assuming all coverages are identical, HDHP+HSA seems better. The employer contribution to HSA effectively lowers the max out of pocket of plan 2 to $3400. Add the $3300 premiums and you're basically just $200 over the PPO premiums. With doctor visit copays, let's call it a wash. That's if you just reach your deductible. If you go over or under plan 2 wins. Plus, you get the shelter up to $4650 in pre-tax money for retirement or in a much more flexible version of a FSA. At equal prescription drug coverage, this is a simple decision. It may be even better in following years if you're healthy enough to not have all those medical expenses.

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Stubtify said:   
geo123 said:   It's true, but the advantage of the strategy is the fact that the earnings are tax free. That sounds great, but for a variety of reasons most people's HSA funds are invested conservatively and most HSA participants don't have access to the same low cost investment options that they have in other types of investment vehicles. Further, people lose records and have issues that end up destroying them, not to mention the fact that if in 20 years an HSA custodian requests additional information to process your HSA claim, you'll be out of luck.
  
Also Wife could get frustrated with large box titled (RECEIPTS 2017) and throw them out in 2033. 

Great points, thanks for the correction as well.

  
From what I understand, unlike an FSA custodian the HSA custodian doesn't give a shit. You just put in an amount and say it was for medical related costs (or whatever valid category applies) and they will disburse it no questions asked.

The only issue is that you have to report it on your return, and at any time you could be audited and then need to provide proof. If you're audited. 

That's my understanding but I'm not a huge expert on the subject. I started scanning in my receipts, bills, and statements when I get them. The hard part for me will be totaling everything... Because I'll make partial payments, then they will send a full statement, etc... It's easy to track how much they bill you but not so much about how much you paid. Maybe I'll go back to my quicken data when the time comes... But even that can be confusing because there are all kinds of qualified expenses such as parking when I go to the hospital.

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justignoredem said:   Stubtify said:   
geo123 said:   It's true, but the advantage of the strategy is the fact that the earnings are tax free. That sounds great, but for a variety of reasons most people's HSA funds are invested conservatively and most HSA participants don't have access to the same low cost investment options that they have in other types of investment vehicles. Further, people lose records and have issues that end up destroying them, not to mention the fact that if in 20 years an HSA custodian requests additional information to process your HSA claim, you'll be out of luck.
  
Also Wife could get frustrated with large box titled (RECEIPTS 2017) and throw them out in 2033. 

Great points, thanks for the correction as well.

  
From what I understand, unlike an FSA custodian the HSA custodian doesn't give a shit. You just put in an amount and say it was for medical related costs (or whatever valid category applies) and they will disburse it no questions asked.

The only issue is that you have to report it on your return, and at any time you could be audited and then need to provide proof. If you're audited. 

That's my understanding but I'm not a huge expert on the subject. I started scanning in my receipts, bills, and statements when I get them. The hard part for me will be totaling everything... Because I'll make partial payments, then they will send a full statement, etc... It's easy to track how much they bill you but not so much about how much you paid. Maybe I'll go back to my quicken data when the time comes... But even that can be confusing because there are all kinds of qualified expenses such as parking when I go to the hospital.


You don't have to use your crappy Employer provided HSA provider. You can roll the funds over to your own HSA provider. Alliant Credit Union has an HSA that basically operates like a checking account -- you are the custodian who decides what expenses to reimburse (and you have to interpret the IRS guidelines correctly in the case of an audit).

I tried the "shoebox full of receipts" idea, but after several years the complexity became too great. I recommend reimbursing expenses yearly. Did you know that those thermal printed receipts that a lot of cash registers use will fade to blank after a couple years? So you need to scan them all if you're going to do the 20 years before reimbursement approach...

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sfchris said:   Make sure to understand the tax implications as that is usually the primary benefit of using an HSA. For example, you can defer $6750 which results in a tax saving much higher than the $200 you mentioned when you eventually use that money (in old age). And also many employers provide "seed money" to HSA accounts but you did not mention this.
  
Yeah so if we somehow *don't* spend the full family-maximum deductible with the HSA plan, I would certainly be tempted to just invest the entire HSA in a savings account (or maybe the S&P 500), pay expenses with post-tax money, let the HSA grow tax-deferred until retirement, and reimburse healthcare expenses from the distant past as part of a retirement strategy.
martint said:   
Also, I re-read that this will be your FIRST child. So are you really on a "family" plan now, or are you on an employee+spouse plan? Will either the premiums or deductibles increase once the child is born?


  
I'm currently looking at the premium costs for "employee + spouse + child" and trying to plan ahead for 2018 based on 2017 prices.

These premium prices are higher prices (and different) than the employee+spouse plan I carry now. (For this current year with just employee+spouse we opted for the "traditional" plan, which was a pretty conservative choice, but we also have a lot of healthcare expenses due to childbirth, so it's probably not a huge loss.)
doveroftke said:   Your deductible and max out-of-pocket for the HDHP is exactly the same?

 


There is a higher "max out of pocket" amount in the HDHP plan beyond the deductible. But I looked closely at a summary plan description and all services in-network are covered at 100% by insurance after hitting the deductible, so it's not clear how the max-out-of-pocket amount applies (maybe to prescription costs?).
vnuts21 said:   
   I disagree strongly on your first point. I never used my FSA when I was on a non-HDHP, because I had no ability to forecast my medical expenses.

  
Note that as of 2014, many FSA plans now allow a $500 rollover, so they're not 100% use-it-or-lose-it. It seems like you carry non-HDHP health insurance and have an FSA plan eligible for the $500 rollover, it always makes sense to have deferred $500 pretax into an FSA (and then just replenish it annually if you incur any eligible expenses). Even a small amount of pre-tax deferral is a minor federal tax benefit.

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it's very important to read and understand the actual details of both plans. we have a "standard" type ppo plan and a hdhp/hsa, and the hdhp has zero copays for anything, you pay 100% (ETA: this is 100% of the insurance-negotiated rate, not full price, so at least it's something) until you hit your deductible. this includes prescriptions, er, inpatient hospital, urgent care, labs, x-rays... everything except a single annual checkup (one "preventative" visit per person is free). the hospital bill alone for a standard child birth could be several thousand, tack another $1k on if you go with an epidural, tack more on for a c-section, additional nights, etc., which would all probably fall under the single copay of a standard plan.

i would lean toward a standard plan if i was expecting a birth during the plan year, for a more stable cost perspective. once the little one is established and healthy and mom is recovered, other stuff starts to look more appealing, especially if adding child means more kicked in by employer for hsa (which isn't necessarily the case). find out what labor + delivery + other possible/likely costs are on both plans; if it's thousands more on the hdhp even with no complications, that may eat up your employer's contribution for that plan year. it may even eat up most of the difference in premiums, especially if you have to stay an extra day or two.

it's not good to make a decision out of fear, but in this case, it may be worth a bit of extra premium for the additional peace of mind when you're already planning for a major life-changing event and recovery.

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One more important warning with regard to either plan. Many in-network hospitals have ONLY out-of-network anesthesia. So you think you're fine and covered and then you get a $1.5k-2k bill in the mail which isn't covered by insurance discount or payment. Make sure you check into all possible providers at your in-network hospital.

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Tresh said:   it's very important to read and understand the actual details of both plans. we have a "standard" type ppo plan and a hdhp/hsa, and the hdhp has zero copays for anything, you pay 100% (ETA: this is 100% of the insurance-negotiated rate, not full price, so at least it's something) until you hit your deductible. this includes prescriptions, er, inpatient hospital, urgent care, labs, x-rays... everything except a single annual checkup (one "preventative" visit per person is free). the hospital bill alone for a standard child birth could be several thousand, tack another $1k on if you go with an epidural, tack more on for a c-section, additional nights, etc., which would all probably fall under the single copay of a standard plan.

i would lean toward a standard plan if i was expecting a birth during the plan year, for a more stable cost perspective. once the little one is established and healthy and mom is recovered, other stuff starts to look more appealing, especially if adding child means more kicked in by employer for hsa (which isn't necessarily the case). find out what labor + delivery + other possible/likely costs are on both plans; if it's thousands more on the hdhp even with no complications, that may eat up your employer's contribution for that plan year. it may even eat up most of the difference in premiums, especially if you have to stay an extra day or two.

it's not good to make a decision out of fear, but in this case, it may be worth a bit of extra premium for the additional peace of mind when you're already planning for a major life-changing event and recovery.

  Very good points about child delivery. My hospital bill was over $7k after network discounts (fortunately I did not have to pay that whole amount). Copay on my PPO plan at the time was a fixed $300 for it where as doctor visits were $20 copay/specialist $25. So double check your copay for child birth as it may not be the standard amount.

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Rajjeq said:   One more important warning with regard to either plan. Many in-network hospitals have ONLY out-of-network anesthesia. So you think you're fine and covered and then you get a $1.5k-2k bill in the mail which isn't covered by insurance discount or payment. Make sure you check into all possible providers at your in-network hospital.

One data point on an HDHP: my son was born at an in network hospital and my wife had an epidural. There were a couple nights in the hospital. We paid $0 for the entire thing, since we had already maxed out the in network employee+spouse deductible for the year.

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Based on the choices described by OP, I think the HDHP is the best deal in an ordinary year when you don't plan any major medical expenses. However I would go for the traditional plan if I knew that there was going to be a baby delivery during the plan year and switch to HDHP the following year if there are no issues with Mom or Baby. In fact, the most important factor for either plan is the max out of pocket amount.

Also, to save money you could use a dula and have a home birth.

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