Why I am going with the HDHP during open enrollment season

For those topics that don't have a place in any of the other forums.

Moderator: Aitrus

Timber82
Posts: 166
Joined: Mon Feb 27, 2017 2:39 pm

Why I am going with the HDHP during open enrollment season

Post by Timber82 »

I think I am about ready to pull the trigger on the GEHA HDHP plan when open enrollment comes around. I am going to present my reasoning to you all and hopefully you'll either dash my dreams with a scorching blow of reality (so bad I need to visit a doctor) or get a lightbulb moment yourself. This is my findings after having talked to my pharmacy, my doctor, Labs, and a heart specialist my daughter saw (thankfully no irregularities found) and numerous e-mails back and forth with GEHA.

Family of 3 (Me, wife, daughter) currently on BCBS Basic

First Some "school" on insurance as I understand it after talking to numerous others, (please correct me if I am wrong).
Deductible - Limit set by plan that once reached "co-insurance kicks in"
Co-insurance, defined amount the plan will continue paying once deductible is hit that is typically better than your copay
Max out of Pocket - After co-insurance is paid, you pay the difference, this will add up to maximum amount out of pocket threshold, so if some god awful thing happened to me the most I'm on the hook for is the first number in the Max OOP), or if both my wife and daughter included max out of pocket is the second number.


BCBS Basic: 2018 Monthly premium - $392.12,No deductible, 5,500/11,000 Max out of pocket (individ/Family)

GEHA HDHP: 2018 Monthly Premium $296.36 $1,500/$3,000 deductible, After Deductible 95% is paid Max out of pocket $5,000/$10,000

So first lets look at the Premium, upfront I am saving $95.76 per month ($1,149/year). Then the GEHA had a "Premium pass through" of $125/month for the family plan which means the insurance company puts $125 into my HSA account for being under their health plan (simplified there may be more to this), but end result every month id get $125 in my HSA. My plan, would be to also contribute the premium difference between the two which would be $125 (pass through) + 95.76 (Premium diff between BCBS & HDHP) = HSA contributions $220.75/Month or $2,649/Year.

So my logic is this, yes it sucks to pay more with having no copay, and the overall "what will I owe?" but if I contribute to the HSA at a minimum the difference, the most I would be out to hit my deductible is $351, and If I stick with BCBS then I am out all that money anyway. The rest of the money (up to the deductible) would be covered by the HSA which if I don't hit deductible I can carry it over)

Ideally of course I would look to max out my HSA as I have for the TSP and perhaps one day we would go back to a typical plan. But my understanding is I am responsible for $100% of my medical costs up to 3K, after that I am only responsible for 5% up to $5000 or $10K if it happens to all of us.

So someone more knowledgeable about this please tell me if my logic is flawed. My thinking is I piss away that $96/Month in BCBS and then I still have copays on top of it, this would allow me to "reclaim" some of that money.

mindofmush
Posts: 353
Joined: Mon Jul 02, 2012 1:38 pm

Re: Why I am going with the HDHP during open enrollment seas

Post by mindofmush »

Many HDHPs will pay for wellness visits (like an annual checkup) though I'm not sure about GEHA.

The longer time you have to build up your HSA and invest it, the better. The IRS will not let you contribute to an HSA once you become eligible for Medicare (whether you apply for it or not). You are allowed to continue investing and growing your HSA after the contribution cutoff, as well as using it for medical expenses regardless of selected health plan.

I think an HDHP is a good choice for people who want to take care of themselves but still want protection from devastating medical events, especially if you have more than 10 years to build up an HSA.
mo meng, mo ching (which loosely means: no money, no life)

tunahound
Posts: 17
Joined: Mon Aug 15, 2011 9:00 pm

Re: Why I am going with the HDHP during open enrollment seas

Post by tunahound »

I track everything you are saying and you are correct. I was weighing the Aetna Plan too but think GEHA is my choice.

You did mention but brushed over the big advantage. You can contribute $6,900 (plus another $1,000 if over 50) of "before" tax money into the plan. The $1500 that GEHA gives you must be subtracted from this amount. This money will carry forward with you into retirement and can be used to pay all of your insurance premiums and bills with money that was never taxed. Plus you can take these funds and invest in the stock market. Basically it is like a Roth IRA for health care. I wish I had found out about this years ago. Bottom line, I don't see any downside as the premium savings and the $1500 given to you brings you to a very good health policy with lower catastrophic limits.

Timber82
Posts: 166
Joined: Mon Feb 27, 2017 2:39 pm

Re: Why I am going with the HDHP during open enrollment seas

Post by Timber82 »

tunahound wrote: The $1500 that GEHA gives you must be subtracted from this amount.
I actually had added that into my last set of questions to GEHA that I have not yet gotten a response from so I didn't touch on it, so the "Max" contribution for me would be - $4,600 for the year.

Another thing I asked is the $5K max oop a continuation of the 3k deductible or would it be 3k deductible then 5k making the most I'm liable for 8K. As well as if this is considered on an annual basis or a "per incident". So say December 30th some tragedy befalls me, that I reach my Max OOP over night, on Jan 1st am I required to meet the Max OOP again for that year or would the incident carry over until it is complete

Timber82
Posts: 166
Joined: Mon Feb 27, 2017 2:39 pm

Re: Why I am going with the HDHP during open enrollment seas

Post by Timber82 »

Something that hopefully I never have to consider, but my motto is always "Hope for the best, prepare for the worst" Here is an article on HSA's and Divorce

http://www.morningstar.com/advisor/t/11 ... ivorce.htm

aowilkins
Posts: 4
Joined: Thu Dec 17, 2015 11:49 am

Re: Why I am going with the HDHP during open enrollment seas

Post by aowilkins »

I have been doing this for two years. I was apprehensive at first, but then I realized I had enough cash and available money in the tsp to cover a catastrophic medical event.

I over contributed last year, so yes half of the premium that is deposited in the HSA counts against the $6900. Hence last year I went over in contribution by $1500 but there is a form you can fill out to have it roll over to the next year (if you ever make a mistake). So no big deal here.

If you don't have cash on hand to cover your medical, I wouldn't recommend doing it unless you are generally healthy.

If you do have cash on hand and you are generally healthy there really is no downside.

The big advantage being that you can go to what ever practitioner you want as long as you are willing to pay more for it.

shadogree
Posts: 25
Joined: Sat Sep 23, 2017 2:28 pm

Re: Why I am going with the HDHP during open enrollment seas

Post by shadogree »

Timber82 wrote:Something that hopefully I never have to consider, but my motto is always "Hope for the best, prepare for the worst" Here is an article on HSA's and Divorce

http://www.morningstar.com/advisor/t/11 ... ivorce.htm
Got the login page.

Is this it? http://www.morningstar.com/advisor/t/11 ... ivorce.htm

The link worked for a bit and then changed to login page. You'll probably have to google it and read it from there.
Last edited by shadogree on Thu Oct 19, 2017 3:26 pm, edited 2 times in total.

tunahound
Posts: 17
Joined: Mon Aug 15, 2011 9:00 pm

Re: Why I am going with the HDHP during open enrollment seas

Post by tunahound »

The max out of pocket is $10K, ($11K for the BC/BS plan). My understanding is once deductible is satisfied, you kick into paying 5%. The part I am unsure of is how does the prescription drug deductible play into this.

I forgot to add that GEHA covers preventive for physicals, dental and vision. The details of how much or how good these benefits is another question to ask assuming an in netweork provider.

Timber82
Posts: 166
Joined: Mon Feb 27, 2017 2:39 pm

Re: Why I am going with the HDHP during open enrollment seas

Post by Timber82 »

shadogree wrote:
Timber82 wrote:Something that hopefully I never have to consider, but my motto is always "Hope for the best, prepare for the worst" Here is an article on HSA's and Divorce

http://www.morningstar.com/advisor/t/11 ... ivorce.htm
Got the login page.

Is this it? http://www.morningstar.com/advisor/t/11 ... ivorce.htm

The link worked for a bit and then changed to login page.
Yeah just google divorce and HSA one of the 1st few hits.

Timber82
Posts: 166
Joined: Mon Feb 27, 2017 2:39 pm

Re: Why I am going with the HDHP during open enrollment seas

Post by Timber82 »

tunahound wrote:The max out of pocket is $10K, ($11K for the BC/BS plan). My understanding is once deductible is satisfied, you kick into paying 5%. The part I am unsure of is how does the prescription drug deductible play into this.

I forgot to add that GEHA covers preventive for physicals, dental and vision. The details of how much or how good these benefits is another question to ask assuming an in netweork provider.
Yes once Deductible is met they cover 95% of services, so I don't know if the 5k is cumulative of the 3K deductible or is it you hit the deductible now you need to pay another 5K before reaching the OOP.

So Dental was another thing I still have questions in for them but it is as far as I know included in the plan and covers 2 cleanings 2 exams, xrays up to $150 etc. My wife has amazing teeth and gums my daughter is only 2, I on the other hand have periodontal disease and require 4 cleanings that are a bit more involved then a normal one and some other issues, with this info I am considering dropping my dental down to just self rather than family and letting GEHA be my wife's primary.

Vision I dropped last year because I got Lasik, lol again where my wife is lucky, never goes to the eye doc and her vision is so great she wasn't even a candidate for LASIK because her eyes were too good.

mindofmush
Posts: 353
Joined: Mon Jul 02, 2012 1:38 pm

Re: Why I am going with the HDHP during open enrollment seas

Post by mindofmush »

The list of Preventive Care exams and screens starts on page 41 of the GEHA HDHP brochure which are covered 100% (in-network providers) and includes the basic annual checkup as well as colon cancer screens, lung cancer screens and mammograms. Definitely something to take advantage of since you paid for it with your premiums.

Most plans have only marginal coverage for dental and vision, so I bought a supplemental plan available to Federal employees. My supplemental dental is Concordia which doesn't pay more than 50-70% of crowns and root canals but has more than paid for itself. I don't believe there is a 5 year coverage requirement prior to retirement for supplemental insurance. Also, I think you can start or stop your supplemental insurance each open season as you see fit.
mo meng, mo ching (which loosely means: no money, no life)

Thaeland
Posts: 28
Joined: Wed Jan 02, 2013 12:05 pm

Re: Why I am going with the HDHP during open enrollment seas

Post by Thaeland »

I have been on the GEHA HDHP for 6 years now and I like it. About half of the premiums you pay go into your HSA and that money can be used towards your deductible. I first heard about these plans by listening to Dave Ramsey. He says they are the best way to keep costs down. The HSA is nice because you get a debit card to use so you aren't filing any claims to try and get reimbursed. You also can use the money to go outside your network. I think its a great choice if your family is relatively healthy but it's also good for those of us who are at high risk for cancer or other catastrophic diseases.
2020 Seasonal Strategy #: 57171

PoorFed
Posts: 43
Joined: Sat Oct 08, 2016 8:27 pm

Re: Why I am going with the HDHP during open enrollment seas

Post by PoorFed »

In general, the purpose of insurance is to pull premiums from a group of people to cover individual members cost based on probability of an event happening. It’s basically all just numbers. For us Feds, health plan premiums are the same regardless of an individual’s age or pre-existing medical conditions. As such, younger and healthier individuals typicallly pay a higher premium than they should and “subsidize” older folks and those with pre-existing conditions.
In determining whether one should switch to a HDPH, I would say that unless you are young and KNOW you are healthy, a HDHP may not work out unless you do the numbers and track your current and anticipated medical expenses into your equation. Although a HDHP premium is generally lower and a portion gets added to your own individual account that you can “bank” you need to factor in that your current $10 co-pay to see the doctor will now cost $100 to see the doctor. That $7 co-pay for your medicine will be $150, etc. I do understand that there is a limit to out of pocket expense and insurance will eventually kick in but ask yourself this question....under a HDHP, will you forgo medical insurance examines and early tratment because of the appearance of higher cost and/or desire to grow your account? My overall opinion is keep insurance as insurance and investment as investment. Don’t mix the two because your actual behaviors may change and you end up doing things opposite of its original intent.

User avatar
evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: Why I am going with the HDHP during open enrollment seas

Post by evilanne »

If you put in the difference between the plans in an HSA, your taxes should be the same (slight advantage in not paying copays with after tax money that normally can't be deducted on taxes if medical costs are below HSA contributions). If you put in more, your taxable income will be reduced by the additional amount. If you can build up your HSA over the years, you may be able to self insure or reduce the amount of long term coverage needed in your golden years :) Great idea if you are young & healthy.

xencfw
Posts: 21
Joined: Thu Nov 15, 2012 10:22 pm

Re: Why I am going with the HDHP during open enrollment seas

Post by xencfw »

I thought about doing the HDHP too. I think for the most part the numbers add up to a good choice but I do have to agree with the previous comment by PoorFed. I'd probably be the one to skip on getting help because I didn't want to pay the sticker price for it. My wife has some health issues that result in us seeing specialists frequently so I think for me I would end up paying more overall with a HDHP.

Also I really dislike paying a percentage of a health cost. If you compare the BCBS basic vs standard plan you'll see on a lot of the categories with the standard plan you pay a percentage. A percentage of any healthcare cost is usually a very bad thing. Would you rather pay $150 for an MRI or 15% of the cost? MRI might run 2-3k so that's $300-$400 versus $150. The only way the standard plan makes any sense is if you have no preferred providers in your area or you get injured and end up in the hospital all of the time because it has free ER if you visit within 72 hours.

This HDHP has a 5% copay so any diagnostic tests you're going to pay and pay until the maximum. At least is 5% but don't show up at MD Anderson where a visit runs up $30k.

Locked

Fund Prices2024-03-28

FundPriceDayYTD
G $18.15 0.05% 1.05%
F $19.08 -0.06% -0.74%
C $82.21 0.11% 10.55%
S $82.43 0.30% 6.92%
I $42.57 -0.24% 5.95%
L2065 $16.38 0.02% 8.37%
L2060 $16.39 0.02% 8.38%
L2055 $16.39 0.02% 8.38%
L2050 $32.73 0.01% 6.95%
L2045 $14.91 0.02% 6.58%
L2040 $54.38 0.02% 6.22%
L2035 $14.34 0.02% 5.79%
L2030 $47.67 0.02% 5.38%
L2025 $13.15 0.03% 3.43%
Linc $25.61 0.03% 2.82%

Live Charts

Pending Allocations

Under development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".