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Questions About Hsa Insurance Vs Ppo

2013 July 10
by Tim Thompson

Lizzie asks…

Health insurance. Would I ultimately be better signing my family up for a HSA vs a PPO?

Tim Thompson answers:

It would completely depend on your family’s demographics, finances, and health history.

We recommend HSAs to some people – but usually only those that can “self insure” and pay for most of their medical expenses out-of-pocket. HSA plans work best for families that can maximize the use of the tax deductability of the contributions into the HSA account.

For a healthy family that rarely sees a doctor, either plan would work, so the main decision is based on picking the plan with the lower cost. If your family needs to see a doctor a few times each year, then a PPO plan would probably be a better fit.

Chris asks…

Health Insurance HSA vs PPO?

My employer is offering HDHP with HSA and PPO plans of health insurance. I hv twin little babies which are 15 months. Which plan best suits for my family? Any suggestions? HDHP has a premium of $195 per month with deductible of $3500 where as PPO has a premium of around $600 per month with a deductible of $2250. Any advise in this regard in highly appreciated…

Tim Thompson answers:

Definitely the HSA. With the PPO, you are going to be out-of-pocket $7200 (for premiums,) no matter if you have any medical expenses or not. With the HSA, the most you’ll be out for is $5840. And if you open an actual HSA account, the money you contribute to it is tax-free as long as you use it for qualified medical expenses.

Daniel asks…

PPO vs HSA. Which is better?

My husband’s employer no longer will offer HMO’s for their employees next year. We have been with our HMO for 7 yrs. He has to choose between a PPO or HSA (health savings acct). We have two healthy school age children. Which insurance is best for a family with small kids? Has anyone had any positive or negative issues with a HSA? PLEASE HELP!!

Tim Thompson answers:

We get a lot of questions about HSA insurance vs PPO plans.

I agree with do the math. There a couple of things to keep in mind, though.

1. An HSA has to be part of a high deductible health plan and the minimum is $1100 per person under the IRS regs. But it’s usually a max of $2200/family (depends on whats offered by your company). However, the deductible must be met BEFORE anything else is covered. And that includes doctor visit and pharmacy copays. So if you are on high blood pressure meds (for example) you will pay the contracted rate (not full price without insurance, but close) until the deductible is met. You will also pay the contracted rate with your docs before the company will pay anything. (The easiest way to find out this amount is to call your doctor’s office and ask)

2. If you want to keep your copays, go with the PPO and stay in the network. However, even if you are at in-network provider, make sure everyone you see is in your network. The way most people get in trouble when moving from a PPO to a HMO is with the ansthetologists, radiologists and pathologists. They aren’t in PPO networks. You will get charged quite a bit from them, because they can charge whatever they want. When you are on a HMO, they have to take the HMO rate to work with the hospital, PCP, etc. This is true for the HSA, too.

If a $500 hit won’t destroy your bank balance (and assuming its cheaper) I would go with the HSA. If you need copays, go with the PPO.

Good luck and I hope this helps!

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