Submitted by newsboyron t3_yhh2wl in personalfinance
What's the situation where it's better to enroll in HSA? I always do FSA, but I'm scared to enroll in high deductible plan (requirement to enroll in HSA) because for a typical primary care visit, for FSA, I only pay $20 Copay, but with high deductible plan, I need to pay 20% coinsurance. Thanks in advance for the info.
To be clear, you pay the plan's negotiated amount, not the cash amount, which can be significantly different. For example, my routine blood work for my physical was charged at $595 but the insurance company negotiated a price of $54. I haven't hit my deductible yet, so I was only charged $54. Even through I have a high deductible I haven't met, I'm still benefiting from the insurance.
It's largely a matter of personal risk tolerance.
For someone young and healthy who might go to the doctor once or twice per year, a HSA + high deductible plan isn't a bad proposition and is liable to save you money compared to a normal insurance policy where you're paying hundreds each month for coverage you simply don't use.
If you have regular doctor visits though, or like the cost certainty of knowing how much you're spending on healthcare even if it means spending a little more than may be strictly "necessary", the traditional plan + FSA is probably better.
I heard FSA needs to be used within that year Ave only 570 can be carried over. But any amount of HSA can be carried any number of years if it’s not used. Also HSA you can invest based on who you have account.
This. Insurance plans aside, HSAs are superior to FSAs because FSA accounts are “use it or lose it.”
I put together a spreadsheet to compare my high deductible plan to the other options and in almost all cases (from zero spend all the way through the out of pocket max), I’m spending less with the high deductible plan + HSA.
> What's the situation where it's better to enroll in HSA? I always do FSA, but I'm scared to enroll in high deductible plan (requirement to enroll in HSA) because for a typical primary care visit, for FSA, I only pay $20 Copay,
FSA is not the insurance plan. Neither is HSA. Read the details of the actual insurance plans! Compare the premiums, coverages, and other employer-provided benefits.
> but with high deductible plan, I need to pay 20% coinsurance. Thanks in advance for the info.
No, you don't just pay coinsurance. You pay the insurance-negotiated full amount until you reach deductible. Then you pay coinsurance until you reach out-of-pocket max.
There is a sweet spot where a non-HDHP PPO is better than HDHP, where you use medical services just frequently enough but not too much.
I have always been a healthy adult that has only needed preventative care. I had an FSA before and it seemed great until the end of the year came, it was set to expire, and I had to spend that money on crap I really didn't need. Ten years later I still have bandaids. Now I have a HDHP with an HSA and fully expect to use little to none of the HSA money. Since it rolls over I'm just going to let it sit there until I need it. I had access to these types of plans before but never tried them because my wages were so low I struggled to keep a 1k emergency fund and couldn't fathom how I'd handle the deductible if I needed non-preventative medical care. Now I'm paid better and see how its possible.
I haven't touched my HSA in 8 years and instead think of it as my emergency medial then retirement medical fund.
Yes this is the mindset I am now adopting.
>What's the situation where it's better to enroll in HSA? I always do FSA, but I'm scared to enroll in high deductible plan (requirement to enroll in HSA) because for a typical primary care visit, for FSA, I only pay $20 Copay, but with high deductible plan, I need to pay 20% coinsurance. Thanks in advance for the info.
Actually you'll pay 100% until you meet your deductible.
We use PPO + FSA instead of HSA.. We have a family and healthcare expenses can get high. Also PPO + FSA covers 90% while HSA covers 80% so for us PPO is better. I can see for a single person that is healthy HSA would be beneficial, then if you start to have multiple health issues switch to a PPO the next year.
What's the premium difference? I've rarely seen a family plan where the HDHP was worse than traditional PPO plan because the trad plan was like $1000/month and the HDHP was $500.
It matters on out of pocket costs for the year. For a PPO plan, I pay $770 a month next year, and HDHP is roughly $650 a month for family plan. PPO pays 100% after $2000 spent in network for family and $1000 per person. $250 per person and $500 per family is the deductable. HDHP is $2500 and $5000 before they cover 100%
I should also say this is our costs and not the full plan costs. Cost of my PPO plan is $18000 a year but my employer picks up 2/3rds the cost.
Ah that's a small cost differential. I usually see much higher differences in premiums alone so the HDHP almost always make more sense.
I had FSA while I was single but I never really went to the doctor and only had like $500 in the account because it expired at the end of the year. I switched to a high deductible plan when I got married and added my husband on to my insurance and got the HSA. I put $1500 a year into it because it rolls over. Neither of us go to the doctors often, just check ups really but we plan on starting a family soon so it made sense to put that money aside to rollover to cover the deductibles for when we get pregnant.
For most of my adult life I had a PPO/traditional co-pay plan. Then about 4 years ago the premiums really became unaffordable and because my husband and I are pretty healthy, we decided to switch to HDP.
The HDP at work has a $1800 deductible, then 10% coinsurance (on the insurance negotiated rates- ie, discounted rates) up to a max OOP of $3600. The monthly premium was significantly less than the PPO plan. Even with maxing out our HSA every year we were coming in at less than the annual cost for the PPO plan. So if we had stuck with the PPO plan we would have spent thousands for plans we didn’t use. By using the HDP, we now have $20k+ set aside for our health care when needed- which will convert to a savings account when we retire (we are only 37, so plenty of time to continue saving). I’m a huge fan of HDPs now. That said you will want to run the math on our own situation to see if it’s worth it.
If you can afford a plan that qualifies you to have an HSA and can max out that account each year it's wise to consider it a retirement account and not a health savings account.
HSA contributions are triple tax advantaged and you can invest that money.
> but I'm scared to enroll in high deductible plan (requirement to enroll in HSA) because for a typical primary care visit, for FSA, I only pay $20 Copay, but with high deductible plan, I need to pay 20% coinsurance. Thanks in advance for the info.
But you're probably paying more each paycheck for that copay plan. So you have to compare total costs.
If the copay plan costs $200/month, but the HDHP costs $100/month, you definitely come out ahead on the HDHP for the first $1200/year in medical costs.
The only advantage of an FSA in my opinion, is the entire years contribution is available on Jan 1. If you plan to leave your job… or have a large bill to pay early in the year
wanttostayhidden t1_iudpptf wrote
>with high deductible plan, I need to pay 20% coinsurance
You actually pay the full amount of all medical expenses (except preventative stuff) before you reach your deductible. The 20% coinsurance comes into play after reaching the deductible.
If you have several appointments a year, HSA might not be a good idea. You have to look at all the numbers (premiums, deductibles, max out of pocket, expected expenses, etc) and see what is best for you.