Health Care - PPO vs HSA

Updated on December 27, 2010
H.S. asks from Little Elm, TX
12 answers

Ok mammas - if anyone will know I figured some of you might. My husband has changed jobs. The new company offers the traditional PPO or HSA (health savings account). Prior to this company and an other company he was/is looking at I've not heard of the HSA. It looks like it might be a good idea instead of the PPO that I'm use to.

Pros of the HSA - money goes towards an account that goes towards routine medical expenses instead of disappearing each month to an insurance company, costs less per month but still reduces taxable income, some areas have lower percentages/deductables etc., can take with us if change jobs again, money rolls over each year, can invest money

Cons (or worries) - never done this before, costs more for regular office visits (but you can take the money from the account and not your regular checking account)....just unsure of the unknown

Do any of you have an HSA? What has been your experience? We are a family of 4. The kids and I currently have private insurance PPO that is expensive and still has a lot of costs that we have to pay for so I'd like to get rid of it (plus it is paid for after taxes and not before).

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answers from Dallas on

I only read a few of the answers but I wanted to help you get something straight. I am in HR and I help put these types of packages together. HSA is not a credit card. That is a a FSA. Its called flexible spending account. The FSA is where you choose to put so much money per pay day into a account which is usually associated with a credit card and then you use this credit card to pay for all your medical expenses pre tax. It is used in conjunction with your PPO. HSA is an account that is not associated with a PPO. YOu basically choose to not have insurance and with the HSA you also put money into an account pretax and then when you have a doctors visit, you pay for it and them apply for a reimbursement from the HSA account. I have seen some companies put this onto a credit card but its rare. Also the FSA is preloaded with your full years amount. So if you say I want $5000.00 this year for my FSA then in Jan you have $5000 to spend. With the HSA you only have access to the money as you pay it. So if you say I want to put $5000 in this year then in you will have $416 per month added to you account.

If your PPO premiums are high and you have the money to pay for doctors visits and can afford to wait to get reimbursed, then HSA is a good deal.



answers from Boston on

In my experience, it's not an 'either/or' type decision. I have both a PPO insurance plan and an HSA. The insurance covers doctor's visits, blood tests, medical procedures, prescriptions, etc. and we use the HSA to pay any out of pocket expenses that are left over (for example, I pay the doctor co-payments with the HSA money and pay for contacts and glasses since they are not covered by our PPO plan). There are usually limits to how much money you're allowed to put into an HSA; I believe it's somewhere around $5,000. If you believe that you can cover ALL of your family's yearly medical expenses for that amount, then you'd be fine with just an HSA, but if anything unexpected were to happen or someone got really sick, you'd be paying everything completely out of pocket because you opted for no insurance. Also we cannot roll over HSA money. If you don't use it by a certain amount of time (this year by 4/15/2010 for 2009 expenses) you lose the money so you have to think ahead and carefully calculate how much you think you'll use. For us, the HSA is an additional benefit, not something we use in place of health insurance.


answers from Dallas on

We have an HSA and catastrophic insurance. We never go to the Dr so we were tired of paying high premiums. When you have the HSA it's like paying cash to the Dr and usually when you tell Dr's that you are cash pay-they will give you a discount-only when no insurance will be applied to the bill. I think it depends on your family situation which one or if both are right for you. Things like preexisting illnesses or if any of you get sick a lot. I have 3 kids that haven't been to the Dr in over a year-since my girls 4yr old shots and checkup-so the HSA was better for us.



answers from Pittsburgh on

Crunch the numbers and see if it will save you some money. I know we same some every month for a family plan.
We chose and switched to the HSA option last year and have no regrets! You can manage/submit your claims online. No problems to report, and like you, I was a little hesitant to change...good luck.



answers from Indianapolis on

For clarity, HSAs are not Flexible spending accounts, they are a new kind of insurance plan, a Health Savings Account in which you are responsible for a considerable deductible (usually $2000-5000) out of pocket before insurance kicks in. You pay all medication costs out of pocket, etc. until you get to the magic number for which insurance begins to cover costs.

I'd always choose the PPO over the HSA personally.

My previous employer gave us the same option a few years ago, and we were glad to have chosen the PPO. My current company only offers an HSA, and I'm glad my husband's company provides a better plan.

Unfortunately, you get what you pay for with insurance. And, while the PPO may be expensive, it may be worth it if something catastrophic were to happen. In our case, no one would ever have guessed that I'd be diagnosed with cancer 10 weeks postpartum and 2 days before my 33rd birthday.
Our insurance was wonderful and has covered almost everything. For the hundreds of thousands of dollars my diagnosis, treatment and post-treatment monitoring have cost, very little has had to come out of our pockets.

See if someone can help you do a cost analysis (financial planner, accountant, etc) to see which one benefits your family based upon how frequently you currently use your plan.

My colleagues at my present company tend to avoid going to the doctor with an HSA because they don't want to pay the out-of-pocket expenses. This only leads to more health care costs down the road as a simply infection can become a much more severe one requiring more expensive, more powerful medications.

Good luck in making your decision. I'm PPO 100% if it's an option.



answers from Oklahoma City on

I'm debating the same thing. I have a 1 year old and I know that he will still have immuniations to take care of, but I never go to the doctor unless it's for my annual check up. How much are the deductibles usually at the dr. with a HSA? I want to make sure that I'm making the best decision. Can anyone give examples of how much different visits cost?



answers from Houston on

I'm no expert but we do both a PPO and an HSA through my husband's employer. The PPO covers the bulk of the medical expenses and then we take money from the HSA to cover our out of pocket costs (co-pays, deductibles, prescriptions, etc.)

The program offered by your husband's company might be different but I would never feel comfortable with only our HSA to cover all of our expenses especially if there were a major medical expense, there would never be enough in the account to cover a hospital stay.

Good luck,



answers from Chicago on

We've had HSA for few years. Two kids plus us. Doctor's visits are $90 versus $30 copay, plus the cost of antibiotics (usually $25). However we're saving each month in premiums ($250) and it is not like every month both kids get sick. Plus all preventive care is 100% covered (yearly visits for Ob-Gyn plus mammograms etc. plus pediatric vaccines etc.). If your family does not have chronic illness requiring monthly drugs, you'll will do fine with HSA. Plus the money you save on premiums, you can put in HSA account and use it for any medical needs. If you do not get sick, the money rolls over to next year. Higher premiums for PPO means that if you are healthy the money is gone each month. HSA contributions stay in your pocket (or rather on your VISA Debit HSA).



answers from Chicago on

I really don't have experience with an HSA but my husband & I are in a Dave Ramsey class & he just spoke about the benefits & cons of an HSA. He went into great deal about it so perhaps you can get his book at the library or purchase it. We have a PPO & love it but the HSA looks like it has some great benefits too. Good luck



answers from Columbus on

Hi there. We have had an HSA for 4 years now and LOVE IT! We are about to be a family of 5 (currently pregnant with baby # 3.. yippee!!) Anyways, Our deductable has always been $5600 and our first year we switched from a PPO to an HSA we were sooo scarred. I was pregnant with baby # 2 when we switched and due in 3 months. All I could do is sit there and freak out on how I was going to afford $5600 to have a baby when my last child only cost me $100 (from tradition PPO plan with $100 deductable). Anyways, the savings from the premiums we were able to put into our HSA and were still ahead on our bring home paychecks after it was all said and done vs our traditional PPO. So far, every year we have hit our deductible, but as you said in your Pro's you are paying yourself this money to be prepared. I always tell people I rather pay myself the $ into our HSA acct than pay it to the gov't in taxes or the insurance company. It seems like you guys are a healthy family so each year you will be paying yourself this money and it rolls over every year. For us, I know I would never be able to save that kind of money so from just our bring home checks so it is great having it taken out with the payroll and it is there waiting for us. Plus saying something happens at the beginning of the year the Dr. offices always have payment plans you can set up and as you get more money in your account you just turn around and pay it.

If you want more positive feedback on it let me know - b/c we LOVE our insurance.

Good Luck!



answers from Dallas on

An HSA is not an insurance plan. Rather, it is an account that you can contribute up to $5950 a year (including employer contributions). What you personally put into it will lower your taxable income which is nice. Although a family can only put in up to $5950 a year into the account, you can do this every year and keep growing the account. It is YOUR money, not a use it or loose it like the flexible account. Then, when you retire you can still use the money from this account to pay for medical expenses.



answers from Dallas on

Health Savings account is a medical credit card. You have to use all the money in the account before the end of the year or you lose all that you put in. These usually go hand in hand with the PPO. Have the insurance and use the HSA credit card for co-pays, medicines, and other things the insurance does not cover (since it does not cover 100% of the bill).

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