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Hi there,
Just hoping for any advice/a quick double check of my brief math when calculating whether the PPO plan vs the HDHP with HSA makes more sense for my family for 2018.
PPO math:
$144.74 per pay period (every 2 weeks) x 26 = $3,763.76 gone no matter what
Deductible: $1,000
Out of Pocket (OOP) max: $6,000
20% coinsurance rate
HDHP/HSA math:
$52.22 per pay period x 26 = $1,357.72 gone no matter what
Deductible $5,400
OOP max: $8,000
10% coinsurance
Max contribution for 2018 = $6,900. Employer puts in $2,500 free (woo hoo!). My additional $4,400 contribution (at 35% marginal rate) saves me $1,540 in taxes.
So, I compare them as such:
Costs just to be on the two plans, spending no healthcare dollars: PPO -$3,763/HDHP +$2682.68 (includes tax savings + free money - cost per pay period)
Cost of the two plans to hit the full deductible: PPO -$4763/HDHP -$2717.72
Cost of the two plans to hit OOP max: PPO -$9763.76/HDHP -$5317.72
It seems like the HDHP wins across the board, is there something I'm missing here? An additional benefit would be the HDHP has a 10% coinsurance rate while the PPO plan has a 20% one.
We have a baby due March 2018, so we may very well hit the deductible/OOP max numbers (or go beyond).
Thanks for any and all advice in advance. I would probably just try to cash flow the expenses and continue to save/invest the HSA money as a 'stealth IRA' (already have ~$12,000 in there, $11,000 invested in Vanguard LifeStrategy Moderate Growth Fund/VSMGX).
Just hoping for any advice/a quick double check of my brief math when calculating whether the PPO plan vs the HDHP with HSA makes more sense for my family for 2018.
PPO math:
$144.74 per pay period (every 2 weeks) x 26 = $3,763.76 gone no matter what
Deductible: $1,000
Out of Pocket (OOP) max: $6,000
20% coinsurance rate
HDHP/HSA math:
$52.22 per pay period x 26 = $1,357.72 gone no matter what
Deductible $5,400
OOP max: $8,000
10% coinsurance
Max contribution for 2018 = $6,900. Employer puts in $2,500 free (woo hoo!). My additional $4,400 contribution (at 35% marginal rate) saves me $1,540 in taxes.
So, I compare them as such:
Costs just to be on the two plans, spending no healthcare dollars: PPO -$3,763/HDHP +$2682.68 (includes tax savings + free money - cost per pay period)
Cost of the two plans to hit the full deductible: PPO -$4763/HDHP -$2717.72
Cost of the two plans to hit OOP max: PPO -$9763.76/HDHP -$5317.72
It seems like the HDHP wins across the board, is there something I'm missing here? An additional benefit would be the HDHP has a 10% coinsurance rate while the PPO plan has a 20% one.
We have a baby due March 2018, so we may very well hit the deductible/OOP max numbers (or go beyond).
Thanks for any and all advice in advance. I would probably just try to cash flow the expenses and continue to save/invest the HSA money as a 'stealth IRA' (already have ~$12,000 in there, $11,000 invested in Vanguard LifeStrategy Moderate Growth Fund/VSMGX).
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