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Started By
Message
HSA high deductible Plan vs Silver/Gold Plan with No HSA
Posted on 4/23/26 at 11:29 am
Posted on 4/23/26 at 11:29 am
Back to my previous thread. Now that I have narrowed things down.
I am split between going with a high deductible low cost plan vs more traditional plan.
I am leaning towards the bronze plan that way I can contribute to an HSA and get the tax saving at the end of the year, and use contributions for doctor visits and prescriptions. It almost make too much sense not to until you realize that if something major happens to me I will have 7,500 dollar bill waiting for me. Plus I will end up having pay 50/50 until I reach the max at 10K.
I also don't like the estimators on the Government site, they seem to lure you into thinking a high deductible plan has lower annual costs, while a lower deductible plan give you better coinsurance but it will take a lot longer to reach the out of pocket max of 10k since your services are now at 80/20 or other combinations. With a high deductible plan, you may reach the out of pocket max quickly and not have to pay more than your premiums and the 10,000 max. While the 80/20 insurance has a long way to go to get to the 10,000 out of pocket max.
I wish the site would allow you add customizable procedures, drug pricing, and estimates to make the numbers sound more realistic.
I am split between going with a high deductible low cost plan vs more traditional plan.
I am leaning towards the bronze plan that way I can contribute to an HSA and get the tax saving at the end of the year, and use contributions for doctor visits and prescriptions. It almost make too much sense not to until you realize that if something major happens to me I will have 7,500 dollar bill waiting for me. Plus I will end up having pay 50/50 until I reach the max at 10K.
I also don't like the estimators on the Government site, they seem to lure you into thinking a high deductible plan has lower annual costs, while a lower deductible plan give you better coinsurance but it will take a lot longer to reach the out of pocket max of 10k since your services are now at 80/20 or other combinations. With a high deductible plan, you may reach the out of pocket max quickly and not have to pay more than your premiums and the 10,000 max. While the 80/20 insurance has a long way to go to get to the 10,000 out of pocket max.
I wish the site would allow you add customizable procedures, drug pricing, and estimates to make the numbers sound more realistic.
4
Posted on 4/23/26 at 11:42 am to Tarps99
Remember, HSA contributions can be invested and the gains are tax free if realized and used for qualified medical expenses.
I’m also pretty sure around age 65, they can be realized, used for any purpose AND not taxed.
Eta: was misremembering as pointed out below. Can be used for non medical without penalty but still taxed as ordinary income as if it was from traditional ira.
If you are young and stay out of the hospital/doctors, then this upside is typically a no brainer.
I’m also pretty sure around age 65, they can be realized, used for any purpose AND not taxed.
Eta: was misremembering as pointed out below. Can be used for non medical without penalty but still taxed as ordinary income as if it was from traditional ira.
If you are young and stay out of the hospital/doctors, then this upside is typically a no brainer.
This post was edited on 4/23/26 at 1:07 pm
Posted on 4/23/26 at 11:56 am to horsesandbulls
I am 45 so still young, but don’t foresee any major complications. Just need to fund the HSA as a backstop to at least 50% as an emergency fund for medical.
The rest I would just worry about making monthly payments or ask for cash pricing and use the HSA for that. Like I explained to someone, the big thing is that it would be easier to get to the out of pocket max faster in a High deductible plan than a traditional plan and you pay less in premiums. With a traditional plan you may pay more in premiums and never reach the out of pocket max.
The rest I would just worry about making monthly payments or ask for cash pricing and use the HSA for that. Like I explained to someone, the big thing is that it would be easier to get to the out of pocket max faster in a High deductible plan than a traditional plan and you pay less in premiums. With a traditional plan you may pay more in premiums and never reach the out of pocket max.
Posted on 4/23/26 at 12:06 pm to horsesandbulls
quote:
I’m also pretty sure around age 65, they can be realized, used for any purpose AND not taxed.
When you hit 65, the funds can be withdrawn for any reason, but they would be taxed the same way they would be for a tradtional 401k/ira. They would still be completely tax free when used for medical expenses/reimbursements no matter when they are used.
I think an HSA is a no brainer if your medical expenses are low and you are pretty healthy, if your employer has a match on it, it is even better. I've been using one for about 8 years now. I built up the HSA balance to the point that it would cover the out of pocket max for my plan and ever since then, every dime that goes in has been invested as an additional retirement vehicle and that is the plan for those funds. I don't try and touch any of it currently and just pay for any medical expenses I have out of pocket.
This post was edited on 4/23/26 at 12:08 pm
Posted on 4/23/26 at 1:08 pm to GoCrazyAuburn
Thanks for the clarification. I’ve updated my post to be a little clearer and accurate.
Posted on 4/23/26 at 1:12 pm to Tarps99
Lay out each plans premiums, coverage and our of pocket max and I'll do the math for you.
Yeah you say you "until you realize that if something major happens to me I will have 7,500 dollar bill waiting for me." but what you fail to note that the difference in premiums could be saved to go towards that 7500. The picture below is a comparison between both plans for my company. And this is BEFORE TAX BENEFITS.
The x-axis represents what you can expect to be charged in medical bills for the whole year. The y-axis represent how much you would actually spend out of pocket (including premiums). You can see that they're a very slim from like 7k to 9k where the HSA is not better (it's above the other curve), anywhere else it's below.
Now to be fair, there's a company contribution of 2k towards the HSA that helps for sure. But the premium difference is also massive.
I showed this to people at work and everyone just kept saying the line of yours I quoted above. Completely ignoring that when you account for the premiums, if you get hit with the high bill, you're paying more. And again this is before the triple tax benefit.
Yeah you say you "until you realize that if something major happens to me I will have 7,500 dollar bill waiting for me." but what you fail to note that the difference in premiums could be saved to go towards that 7500. The picture below is a comparison between both plans for my company. And this is BEFORE TAX BENEFITS.
The x-axis represents what you can expect to be charged in medical bills for the whole year. The y-axis represent how much you would actually spend out of pocket (including premiums). You can see that they're a very slim from like 7k to 9k where the HSA is not better (it's above the other curve), anywhere else it's below.
Now to be fair, there's a company contribution of 2k towards the HSA that helps for sure. But the premium difference is also massive.
I showed this to people at work and everyone just kept saying the line of yours I quoted above. Completely ignoring that when you account for the premiums, if you get hit with the high bill, you're paying more. And again this is before the triple tax benefit.
Posted on 4/23/26 at 1:25 pm to GoCrazyAuburn
quote:
I think an HSA is a no brainer if your medical expenses are low and you are pretty healthy,
With my HDHP and HSA there is a narrow region of spending that would have been more advantageous to have the PPO plan. Any spending below OR above this region, the HDHP is better. However, my deductible is half the OP’s and max OOP is 7500. I did the process of evaluating the different scenarios before pulling the trigger on the HDHP about 5 years ago. Wish I would have done it sooner. I just pay out of pocket and keep my receipts so I can let it grow in investments for now. Can’t beat the triple tax advantage.
TLDR Its worth crunching the numbers even if your health spending is not low.
Posted on 4/23/26 at 1:30 pm to CoolHand
quote:
With my HDHP and HSA there is a narrow region of spending that would have been more advantageous to have the PPO plan.
Yea, there are definitely scenarios where an HSA may not be the best option. I think usually someone that has a lot of prescription drug costs would be one that i've normally seen where the PPO is better or at least sticking with the PPO is better. That would still be dependent on the plans as some HDHP cover prescriptions better than others. To your point though, I'd wager more often than not, most people would benefit long term from the HSA.
quote:
I just pay out of pocket and keep my receipts so I can let it grow in investments for now. Can’t beat the triple tax advantage.
Also worth noting, there is no limit as far as when you can reimburse yourself for these expenses. Save the receipts for your whole life and then in retirement, reimburse yourself for something you paid for 30 years ago, tax free.
Posted on 4/23/26 at 2:14 pm to GoCrazyAuburn
quote:
Also worth noting, there is no limit as far as when you can reimburse yourself for these expenses. Save the receipts for your whole life and then in retirement, reimburse yourself for something you paid for 30 years ago, tax free.
I've asked this before, but what's stopping someone from reimbursing the same receipt every year? From my experience there is very little to no documentation required for reimbursement.
Posted on 4/23/26 at 2:25 pm to RickAstley
quote:
I've asked this before, but what's stopping someone from reimbursing the same receipt every year? From my experience there is very little to no documentation required for reimbursement.
Theoretically you could. An Audit is the only real way it would get caught. I use Health Equity and when I file for a reimbursement, it does have me upload documentation with service dates, provider, etc. The HSA does have some automated checks and it might get flagged.
Short answer, the only things stopping someone from doing that would be breaking the law and getting caught if audited.
Posted on 4/23/26 at 2:34 pm to CoolHand
There's that.. And then you max out your HSA every year, use it very little and then after 5 years, you have 30k in an account so when you do have that issue, you got da cash!
Posted on 4/23/26 at 11:15 pm to Tarps99
quote:
wish the site would allow you add customizable procedures, drug pricing, and estimates to make the numbers sound more realistic
Out of a government website? Oh, my sweet summer child.
I don't know how old you are, but once your kids are about 2nd grade, they don't need a lot of medical care. My old HDP had a deductible of $1700, which I hit in February, right before they laid me off. Obamacare HDP are $5k, generally, from what I'm seeing.
HSA all day, and there isn't even a discussion since Obamacare was passed (I had one kid born pre ACA, and one after, and the second one was 2x the cost of #1, before I switched to a HDP with an HSA.)
Posted on 4/24/26 at 5:57 am to Tarps99
I offer two plans. An HSA and a low deductible PPO. The higher earners choose the HSA, and the lower earners choose the PPO. Both plans have the same access.
I have the HSA. The tax savings is motivation enough. The balance keeps increasing. It is great to know that I can now fund the full out of network deductible for the next 2+ years, if that was to happen.
However, if I was not looking for tax saving strategies, I would go for the low deductible PPO. Its hard to beat if your employer is paying for/subsidizing the premiums.
I have the HSA. The tax savings is motivation enough. The balance keeps increasing. It is great to know that I can now fund the full out of network deductible for the next 2+ years, if that was to happen.
However, if I was not looking for tax saving strategies, I would go for the low deductible PPO. Its hard to beat if your employer is paying for/subsidizing the premiums.
Posted on 4/24/26 at 7:56 am to Mariner
quote:
However, if I was not looking for tax saving strategies, I would go for the low deductible PPO. Its hard to beat if your employer is paying for/subsidizing the premiums.
That was the point of my original post. Providing health insurance for small business employees was getting too expensive so they are dropping the plan they offered because it got too expensive. In dropping they offered some compensation to find a new plan not sure at this point if it is pretax through a ICHRA or just straight here is x find you new insurance.
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