HDHP/HSA or not… anyone else deciding?

to pick HDHP, PPO, EPO, HMO… it’s the annual question.

anyone else find themselves stuck on this choice each year? i’ve spent a lot of time comparing options, so i know a fair bit by now. happy to answer any questions! and just to be clear, i’m not trying to sell anything here—just sharing the math.

spoiler: if you make the right choice early on, you’ll probably be glad years down the line!

imagine this: you have one emergency room visit, and you’re suddenly facing your entire out-of-pocket max.

then picture another plan where the ER visit only has a fixed $200 co-pay. which plan would you go with?

@Zane
hey there,

what i usually do is a quick math exercise based on the plans my company offers to see which one is the better deal.

the key is looking at your net out-of-pocket costs.

  1. no healthcare use: in this case, the savings are the premium difference between PPO and HDHP + any employer contributions + tax savings on HSA, which often adds up to around $7k or more.

if you’re, say, 30 years old, this could grow to around $74,736 at a 7% compound return.

  1. hitting the individual OOP max: this could happen if someone has serious medical needs. if your deductible is $5k and your OOP max is $10k, with 20% coinsurance, the medical bills would need to reach $30k to max out. how often do you hit a $30k bill?

  2. hitting the family OOP max: the odds of this happening are pretty low.

i’ve got all the numbers in a spreadsheet, so let me know if you want to check it out!

definitely worth it if you’re in good health and can save on the premiums!