HSA vs PPO

[TULSARISING]

What do you all think is a better option ?
The high deductible HSA where you put money away each month ?
Or the PPO that has a lower deductible but your doctors visits are just the copays?
And which do you think is better for emergency room / hospital stays ?
( I know ; a fun topic )

 

[TUMU]

What do you all think is a better option ?
The high deductible HSA where you put money away each month ?
Or the PPO that has a lower deductible but your doctors visits are just the copays?
And which do you think is better for emergency room / hospital stays ?
( I know ; a fun topic )

If you're young and healthy with relatively low annual medical expenses, I would go with the HSA.
HSA's are triple tax free. Reduce your taxable income each year, grow tax free and you withdraw money tax free to pay for qualified medical expenses.
You carry over all unused money each year, unlike a Flexible Spending Account (FSA).
If you can pay your annual deductible and out of pocket expenses without using your HSA money, it's possible to build up a nice HSA nest egg to pay for large unexpected medical expenses in the future while working or in retirement.
Once retired, using HSA money for qualified medical expenses may keep you in a lower tax bracket or out of a higher income bracket when it comes to paying for your Medicare insurance.
There can be other benefits of a HSA, but I think I covered the main one's in my opinion.

 

[watu05]

Agree with the advantages of an HSA listed above, but aren't HSA and PPO plans different type of plans? I think I"ve had both at the same time in the past. A PPO (Preferred Provider Plan) allows one to pay a lower premium and copays if one goes to a 'preferred provider'. Maybe things have changed since I went on Medicare.

 

[TUMU]

Agree with the advantages of an HSA listed above, but aren't HSA and PPO plans different type of plans? I think I"ve had both at the same time in the past. A PPO (Preferred Provider Plan) allows one to pay a lower premium and copays if one goes to a 'preferred provider'. Maybe things have changed since I went on Medicare.

Any HSA must be teamed with a high deductible health plan (HDHP), which can be part of a PPO.
In summary, an employee can choose a PPO with a high annual deductible, a lower monthly premium and a HSA.

Of course you could belong to a PPO without a HSA. Then you would have a lower annual deductible with a generally higher monthly premium, without the triple tax advantages of contributing to a HSA.
Some employers might contribute or match up to a certain dollar amount into the employee's HSA.

 

[drboobay]

My opinion is that you have to run the numbers yourself. My numbers said HSA for many years but then we got a big premium increase. At that point, my wife's PPO plan became the winner over my HSA plan.

It is hard to compare BTW. You essentially need to model out a full year of premiums plus health costs and consider the tax benefit of the HSA too.

They make it hard to compare and come to any general conclusion beyond yourself.