HSA vs PPO for birth next year
Hello. With open enrollment about to start, I’m looking for a second set of eyes on our health plans and my reasoning.
My wife and I have been on her work HDHP w HSA for the past few years. She is pregnant now and expecting end of March next year. With open enrollment about to start I’ve been running numbers and trying to guess the best financial decision to make with respect to which plan we use. Both plans use the same in-network doctors and hospitals for the providers we are using.
The decision over which plan to choose is for my wife only. She would be single coverage for the first few months and then change to employee + 1/family coverage after the birth. (I am covered separately by my employer and for various reasons can’t be on her coverage).
PPO (employee only)
$57/month premium, $200 deductible, $7350 OOP max
Pregnancy costs, $20 co-pay for Ob-Gyn, childbirth delivery & professional services $0
Other medical services, co-pays between $20 for a visit up to $250 for ER
HDHP w HSA (employee only)
$22/month premium, $1600 deductible, $3500 OOP max, employer contribution $60/month
Pregnancy costs 10% coinsurance, all other medical services 10% coinsurance
I based my calculations on my wife being employee only Jan-Apr and then employee +1/family from May-Dec.
PPO: Premium $228 + deductible $200 = $428 plus some $20 charges for the ObGyn and the rest of the childbirth is covered free.
HDHP w HSA: Premium $88 – employer contribution $240 – 25% tax savings on personal contributions to HSA $285 + deductible $1600 = $1163 For the rest of the childbirth costs would be 10% coinsurance which would drive the amount higher.
So I guess initially it would make sense to choose the PPO plan.
As childbirth is a QLE we would make this election and I think the PPO choice still makes sense.
PPO (employee +1/family)
$124/month premium, $400 deductible, $14700 OOP max
HDHP w HSA (employee +1/family)
$56/month premium, $3200 deductible, $7000 OOP max, employer contribution $1440
Say childbirth costs $20,000. If we use the PPO, we would be out about $450 before changing over to the family plan. What worries me about that is the really high OOP max of $14700 for anything further in the year.
If we are on the HDHP w HSA after childbirth, I am guestimating we would be out about $3163 ($1163 from above plus 10% coinsurance of estimated $20000 childbirth bill). This would then bring us up to near the family deductible for the rest of the year. We’d get another $960 from my wife’s employer contributions to the HSA and save $692 on taxes.
So by my whiteboard maths this would be a difference of around $1061 favoring the PPO before any further medical appointments were made, which is quite a few ER and GP visits.
Does what I’ve noted here make sense and compute? Thanks 🙂