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Health Savings Accounts For Dummies

Posted in Uncategorized | August 27th, 2011

Health savings accounts for dummies?

So, if we go with an HSA, we’ll have a $2600 deductible, $6000 out of pocket maximum and a monthly premium rate of $557. I am an idiot about this stuff–I admit it! So, do we pay that ridiculous amout of 557 a month AND pay full price for every doctor visit until the 2600 deductible is met? Or does that 557 go into an HSA that we manage? I don’t know yet if the employer is contributing. And please explain out of pocket. Really appreciate any help!
This is a family plan. We have a baby and are in our late 30′s.

I’m assuming this is an individual plan because I don’t see anything regarding an employer.

I’m also assuming you’re in your 50′s because otherwise that’s pretty darn high for a “QHDP” (HSA qualified plan).

Yes, (unless you find a better plan) you pay the $557/month and when you go to the doctor you’ll pay the “network negotiated rate” (that’s the “approved amount” when you get your explanation of benefits – EOB) so that could be significant savings right there. The largest drop in this was from a $8500 hospital bill down to $1500. But I’ve also seen $1500 bills not reduced at all. Anyway, you won’t pay “full” price, you’ll pay the insurance company’s price.

Deposits into an HSA are OVER and ABOVE the premium payment. You can put up to $5800 in the account this year…I believe that’s going to $5950 next year, but I’m shooting from the hip on that one.

After you get through your deductible you’ll split the bills with the insurance company. I don’t know what the split is with what you provided but it could be 80/20, 70/30, 60/40, 50/50 (with the first number being the insurance companies share of the bills and the 2nd being yours). Once you’ve paid a total of $6000 the insurance company will pay 100% of the future bills for the year. The other thing to compare when comparing plans is that $6,000 could be in addition to the $2600 deductible OR it could be included in it. Different companies treat it differently so you just need to look to see how it will be treated.

Anyway at $557/month I hope you looked at 3 or 4 different companies……ESPECIALLY if you’re under 50.

In Maryland that premium would insure a whole family where the oldest applicant is 51 or a couple age 58. That’s the cost for a $2,400 deductible HSA with a $5600 out of pocket max.

Hope that helps…