HDHP and regular insurance plans

[livingalmostlarge]

Did most people go with HDHP after FIRE? Did anyone ever opt for a regular insurance plan? How large a deductible did people pick? What was the price difference in the premiums for the HDHP and normal insurance plan?

Before you retired did you have an HDHP? Did you save/use a lot? Were you even given the option to select HDHP or regular insurance plan?

Just something I'm thinking about is we've never had an HDHP plan offered too us. We've only had normal insurance plans.

I'm curious how people calculated the breakeven point of HDHP versus regular insurance and what their findings were.

 

[ratface]

I regret not buying a better plan this year. I turn 65 this year and have been paying lots of out of pocket expenses because of an unexpected health issue. On top of that my Bronze plan is out of network for some of the specialist I need to see. Health issues are unpredictable and can quickly escalate into the max out of pocket range. In retrospect I would buy the best insurance I could afford or at the very least a HD plan with nationwide access to providers in case of serious illness. It seems a well funded HSA is a good way to minimize the risk of a HD plan so as to not be taxed for medical expenses.

 

[qwerty3656]

a HD plan with nationwide access to providers in case of serious illness

You're not going to get that in the ACA (at least my state and I think most states are state by state). I live on the border between 2 states with the big city in the other state - we cannot use any doctors in the other state.

 

[PaunchyPirate]

I never used an HSA-compatible high deductible health plan at work. I probably should have, but did not appreciate the full benefit until about my last year of work.

Since retiring, I have decided that spending the money for a Gold plan works best for me. I have a few medical conditions that make the overall costs of bronze plan and a gold plan to be the same over the course of a year. So I go gold. I consider my current plan from Blue Cross/Blue Shield to be very, very good. It is a PPO plan and it includes all medical providers nationwide that accept BC/BC. This is an ACA plan. Plans this good are not available everywhere. I’m in my 2nd year with this plan. Prior to that regional HMO plans were the only thing available to me.

I have HDHPs available to me (even a gold one), but the numbers just don’t add up for me to use it.

 

[RunningBum]

Every year I do a spreadsheet with the various plans, incorporating premium cost, deductible, and max out of pocket. I usually weed out the ones that my medical providers won't take unless there is significant enough savings in premiums to consider going out of network for care.

Then I start adding in incremental medical costs. Because Bronze plans are always cheapest to me, if I have little or no medical costs, the best bronze wins out. What's harder to factor in is that often Gold and Silver plans will have better co-pays, so I just keep that in mind. I won't qualify for Cost Saving Reductions since I can't get my MAGI below 250% FPL. If I could I'd try to figure out how to factor that in too.

At some point as medical costs increase, usually a Gold plan becomes best.

For HSA eligible plans, I factor in the benefit of the MAGI reduction with an HSA contribution. This is the reduction in state and federal income taxes and the increase in ACA subsidy. I do not try to factor in the future benefit of tax free growth inside the HSA as long as I'm able to eventually withdraw with qualified medical expenses, but I do keep that in mind.

Most years the best Bronze HSA eligible plan has a large advantage with low medical expenses, and Gold has a relatively small advantage, and I've always taken my chances on the bronze. That has worked out more years than not. When there was an ACA cliff, in some years the MAGI reduction from an HSA contribution kept me from going over the cliff so that Bronze plan was a clear winner all the way. So I have always used a Bronze HSA plan, but that doesn't mean you should.

You should really do your own calculations, but simplified, these would be my guidelines:

1. Eliminate plans that don't include your medical providers unless there is a huge premium savings
2. If you can qualify (under 250% FPL) for cost saving reductions (CSRs), you should probably pick a Silver plan for that. I say that with no personal experience but on the surface it looks better to me.
3. If you're generally healthy and have no reason to expect high medical expenses, you should probably pick the lowest cost Bronze plan that is HSA eligible. I can't say for sure that you shouldn't pick the lowest premium one not HSA eligible, but the HSA benefit to me has always worked out better.
4. If you tend to reach your deductible more years than not, pick a Gold plan with a low deductible. However, if you reach Max OOP, the Gold advantage is usually reduced. In my experience Gold plans have had slightly higher max OOP than others. That may not be universal.

If you have high prescription medicine costs, check the various plans to see if that changes your decision. Some have a % cost you bear after deductible, some has a fixed $ cost (I assume also after deductible but I'm not certain).

 

[qwerty3656]

I consider my current plan from Blue Cross/Blue Shield to be very, very good. It is a PPO plan and it includes all medical providers nationwide that accept BC/BC. This is an ACA plan.

I have Blue Cross - I am surprised you were able to get a national plan. What state do you live in? I live in Michigan and anything outside of Michigan is considered out-of-network. I can use out-of-network doctors but then higher deductibles and copays apply.

 

[retire48in2018]

My BCBS is the same - national

I had to check the documents on each plan, as well travel enough, that national was important

 

[retire48in2018]

Sorry / mine was Illinois based ACA plan

 

[PaunchyPirate]

I have Blue Cross - I am surprised you were able to get a national plan. What state do you live in? I live in Michigan and anything outside of Michigan is considered out-of-network. I can use out-of-network doctors but then higher deductibles and copays apply.

I live in Western Pennsylvania. Our BC/BS company is Highmark. The last 2 years they have offered lower end plans that do not provide this coverage and higher end plans that do. They brand this feature “BlueCard”. But you still need to check the fine print because they use that same term to mean “nationwide emergency care”. For my plan, BlueCard means “ you get in-network access to providers outside of western Pennsylvania for routine, emergency, and urgent care, too.”

The providers must be in-network to the local area, however. But that’s a pretty wide network. Almost everyone takes the local BC/BS.

Also, like I said, they didn’t offer this 3 years ago. I keep my fingers crossed they keep it for 4 more years when I can get Medicare. I like the added comfort for travel purposes.

 

[teej1985]

The ACA HDHP plans look pretty terrible to me - massive deductibles vs my $1500 deductible in my FEHB HDHP. If I were to FIRE and qualify for subsidies, I'd get a cheap silver PPO plan rather than the HDHP, most likely.

 

[orchid55]

Available ACA plans vary widely by state. In my area (Atlanta suburbs) ACA only offers HMO plans and none of them are nationwide. However the deductible for the HSA plans are less than the deductible for the regular bronze plans, so that is something else to consider.
Also check the maximum out of pocket on the plans. Often the bronze and gold plans have the same maximum out of pocket.

 

[pb4uski]

Did most people go with HDHP after FIRE? Did anyone ever opt for a regular insurance plan? How large a deductible did people pick? What was the price difference in the premiums for the HDHP and normal insurance plan?

Before you retired did you have an HDHP? Did you save/use a lot? Were you even given the option to select HDHP or regular insurance plan?

Just something I'm thinking about is we've never had an HDHP plan offered too us. We've only had normal insurance plans.

I'm curious how people calculated the breakeven point of HDHP versus regular insurance and what their findings were.

We had a HDHP when I worked and stated the same... then later a Bronze level ACA plan. Luckily, we were both healthy, but health insurance protected us against a statstrophic health event and gave us access to negotiated rates for health care services.

We saved a lot over a plan with a lower deductible. We have some friends and the wife proudly proclaimed that they had a platinum plan. Later on her DH and I were comparing notes and I think he realized that the platinum plan that they were so proud of were costing them a lot because they are relatively healthy and didn't spend much each year on health care.

I think if you compare the sum of annual premiums and maximum deductibles then you get a reasonably fair comparison... IOW, worst case cost per annum.

Now if you use a lot of health care services and exceed the deductible each year then in some cases you might be better off with a silver or gold plan.

Ironically, now that we are on Medicare our Part B premium and Medigap and Part D (Rx) premiums are about $100/month more than our ACA premium... but now our deductible is $226/year vs previously over $6,000/year.

 

[Aerides]

I would be paying multiples of my ~$200 monthly premium if I went with a silver or low deductible plan. I have HD, $6400 in network deductible.

Ok by me, I can plan for it, and sock away about the same into an HSA every year, which, with DH doing the same means we also help drive our premiums down with the MAGI reduction.

Some years stuff happens and one of us fills up the deductible. Most years, so far, we haven't. This year I'm on track to do so as I've got a surgery coming up, and so I pack in other maintenance - like stuff I could have done last Oct-Dec I waited till Jan.

 

[FLSUnFIRE]

I have a HDHP now and had one when working. When working there was a small pass through of about $100 month employer contribution that made my cost of insurance very cheap... one year I actually got "paid" to have the insurance as the pass through was more than my after tax portion of the premium! Now I am on ACA and have a Bronze HDHP and contribute to my HSA while paying my bills out of my regular allowance. I am, and always have been, a huge fan of HD plans. (even on years I hit my deductible -Jan 3rd one year)

 

[mpeirce]

The ACA HDHP plans look pretty terrible to me...

Health plans vary around the country.

I’ve had a HDHP with a HSA (non-ACA) for over a decade and my HSA is worth well over $100K. I can use this for future health care expenses or the kids get it if I don’t spend it all before I exit). It’s invested in a simple S&P 500 fund and has grown nicely over the years.

If you are unhealthy and spend a lot on medical expenses you might not be able to save much into an HSA, but if you are healthy, having access to an HSA is worth a lot!

 

[teej1985]

Health plans vary around the country.

I’ve had a HDHP with a HSA (non-ACA) for over a decade and my HSA is worth well over $100K. I can use this for future health care expenses or the kids get it if I don’t spend it all before I exit). It’s invested in a simple S&P 500 fund and has grown nicely over the years.

If you are unhealthy and spend a lot on medical expenses you might not be able to save much into an HSA, but if you are healthy, having access to an HSA is worth a lot!

The ACA HDHP plans I've seen have deductibles of like $6k -$7.5k, double that for married folk. That is 4x the HDHP deductibles in my FEHB.

If I were to retire and manipulate my income to get subsidized ACA, the silver plans seem like a much better deal because the premiums are next to nothing and the deductible and coinsurance is almost nothing whereas the HDHP ACA plan has no premium but $6k+ deductible. Nothing to do with being healthy or not, I guess unless you really want the additional years of HSA contributions. I have $25k+ in my HSA, and it should be 100k by the time I'm in my 60s easily even if I stop contributing. The subsidized silver plans seem like a much better deal - at least in the event you actually need to use the insurance.

 

[mpeirce]

Nothing to do with being healthy or not

My point wasn’t some kind of discount for being healthy, rather referring to being healthy not resulting in much in the way of insurable expenses. If you are healthy you don’t spend much OOP regardless of the deductible.

I literally haven’t spend more than a couple of hundred dollars a year on heath care since I retired. Getting health insurance that covered everything with no deductible would have be fine, but I would have lost out on the opportunity of using the HSA as a tax free investment account.

For some people it wouldn’t work out well at all. My sister, for example, is a “health care consumer”. Her husband’s insurance (from work) has a high deductible with an HSA and she hates it because they always spend the deductible OOP before the insurance kicks in. They never have been able to save money into the HSA, so it’s pretty worthless to them.

 

[qwerty3656]

If I were to retire and manipulate my income to get subsidized ACA, the silver plans seem like a much better deal because the premiums are next to nothing

That may be true for the HMO's, but not the PPO's. The Silver PPOs are pretty pricey. I think the difference between Bronze and silver premiums was pretty close the the difference in deductible (i.e. if the deductible was 6k more the difference in premium was near 600/month), so if you're reasonably healthy you have a good chance of not burning through the deductible plus you get to fund an HSA.

 

[teej1985]

That may be true for the HMO's, but not the PPO's. The Silver PPOs are pretty pricey. I think the difference between Bronze and silver premiums was pretty close the the difference in deductible (i.e. if the deductible was 6k more the difference in premium was near 600/month), so if you're reasonably healthy you have a good chance of not burning through the deductible plus you get to fund an HSA.

Some states don't even have PPO options in ACA.

 

[livingalmostlarge]

How high are people's deductibles? Do most people not hit it in FIRE? I just figured out DK2 will hit the deductible annually probably. Our regular PPO is $1500 OOP annual max and that will be done in one month of her therapy. So i'm just looking at options an idea. I wonder if HDHP would be worth it if we fire. We pay $144 biweekly for a family for our PPO $3744 annually plus our $1500 pp/$4500 family max OOP.

When I had the kids we paid $96 biweekly for a premium plan. I don't recall a deductible or annual max just copays. Cost me $250 to take the kids home from the hospital including $100k NICU stays. We've never had a HDHP. And I would say we've been relatively healthy except for the birth of our kids.

But now I'm not sure so with the kids and their expenses

 

[PaunchyPirate]

How high are people's deductibles? Do most people not hit it in FIRE? I just figured out DK2 will hit the deductible annually probably. Our regular PPO is $1500 OOP annual max and that will be done in one month of her therapy. So i'm just looking at options an idea. I wonder if HDHP would be worth it if we fire. We pay $144 biweekly for a family for our PPO $3744 annually plus our $1500 pp/$4500 family max OOP.

When I had the kids we paid $96 biweekly for a premium plan. I don't recall a deductible or annual max just copays. Cost me $250 to take the kids home from the hospital including $100k NICU stays. We've never had a HDHP. And I would say we've been relatively healthy except for the birth of our kids.

But now I'm not sure so with the kids and their expenses

In my PA location, here are the deductibles for the available HDHP plans (from 2 different providers) on our exchange:

Bronze EPO - $6900
Bronze PPO - $6900
Gold EPO - $1700
Gold HMO - $3000
Gold PPO - $1700

I am not on an HDHP. Instead I am on a regular Gold PPO plan and my in-network deductible is $0. In a couple previous years of ACA, I had a $1000 deductible.

 

[RunningBum]

How high are people's deductibles? Do most people not hit it in FIRE? I just figured out DK2 will hit the deductible annually probably. Our regular PPO is $1500 OOP annual max and that will be done in one month of her therapy. So i'm just looking at options an idea. I wonder if HDHP would be worth it if we fire. We pay $144 biweekly for a family for our PPO $3744 annually plus our $1500 pp/$4500 family max OOP.

I've used an HSA HDHP plan nearly every year of ER since 2012, and have only hit the deductible twice. I've seen posts from others in ER that do not regularly hit their deductible either, and some that do. If you do have high medical expenses, you need to also look at max out of pocket (max OOP). I often find my HSA plan to have the lowest max OOP.

Run your numbers for various levels you might have for expenses with the various deductibles and max OOP, including your premiums as an expense. Prescription costs and doctor visit charges differ between plans but I find those harder to assign a value to, but they are factors.

 

[fh2000]

Did most people go with HDHP after FIRE? Did anyone ever opt for a regular insurance plan? How large a deductible did people pick? What was the price difference in the premiums for the HDHP and normal insurance plan?

Before you retired did you have an HDHP? Did you save/use a lot? Were you even given the option to select HDHP or regular insurance plan?

Just something I'm thinking about is we've never had an HDHP plan offered too us. We've only had normal insurance plans.

I'm curious how people calculated the breakeven point of HDHP versus regular insurance and what their findings were.

DW and I retired in Jan/2019. We both used ACA Bronze HDHP PPO for 2 years. Deductibles were around $6900 for each person.

I joined Medicare in 2021. DW stayed with the same plan. Her deductible is now around $7000.

We used very little health care only few hundred dollars each person each year so far. If this changes for DW, we will then move her to a different plan.

 

[ArkTinkerer]

We had been doing the BCBS HSA health plans for the last few years but this year the numbers just didn't make sense. They were charging more for anything that was HSA qualified. Went with another plan that wasn't HSA but had slightly higher deductible. Cost was about $100 less per month. Not sure about the rational for why it didn't qualify as an HSA plan.

 

[FLSUnFIRE]

We had been doing the BCBS HSA health plans for the last few years but this year the numbers just didn't make sense. They were charging more for anything that was HSA qualified. Went with another plan that wasn't HSA but had slightly higher deductible. Cost was about $100 less per month. Not sure about the rational for why it didn't qualify as an HSA plan.

Can you elaborate, what were they charging more for? I'm happy with my BCBS HSA through the marketplace and am curious.