Health Insurance Plans
Category: Health > Alternative
Asked by: mbm0523-ga
List Price: $8.00
30 Mar 2006 08:37 PST
Expires: 29 Apr 2006 09:37 PDT
Question ID: 713613
What are the differences between a PPO and HSA health insurance plan and what are the major considerations that need to be taken into account before making a choice between the two?
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Re: Health Insurance Plans
From: jack_of_few_trades-ga on 30 Mar 2006 10:13 PST
A Health Saving Account (HSA) is not insurance. It is an account you can set up where you put money in pre-tax (the money you put in is tax deductible) and then you must use the money during the same year on any medical expenses. If you fail to use all the money that you put in, then you lose the remainder. A PPO is health insurance that typically has "in network" health care providers that you can use fairly cheaply (insurance pays most of the bill)... or you can use a "not in network" provider at a greater cost (insurance pays little of it). You can have a PPO and a HSA at the same time. Starting in 2005, there was a new type of insurance plan called a High Deductible Health Plan (HDHP). This plan (as the name suggests) has a high deductible that you must meet before the plan starts paying most of your medical bills. At the same time, the plan deposits money (Aetna deposits $125 per month) into a Health Savings Account that is attached to the HDHP. This account is similar to the HSA mentioned above, but the money does not go away at the end of the year... also, both the insurance company and the individual can place money into this account. These plans are very good for a fairly healthy individual since the money will continue to accumulate over time. I know that the Federal Govt offers HDHPs, but I'm not sure how many businesses do at this time.
Re: Health Insurance Plans
From: kime1r-ga on 30 Mar 2006 11:03 PST
In fact, HSAs generally carry over from year to year, and /must/ be accompanied by a HDHP. There are other similar types of plans, including Medical Savings Accounts (MSAs) and Flexible Spending Arrangements (FSAs), each of which has slightly different rules, and some of which are "use-it-or-lose-it" -- that is, unspent money is lost at the end of the year. To learn definitively and in detail about these types of plans (although it doesn't discuss PPOs, the other part of your question), consult IRS Publication 969, "Health Savings Accounts and Other Tax-Favored Health Plans": http://www.irs.gov/pub/irs-pdf/p969.pdf Also, you might want to discuss this topic with your health care provider, financial professional, and/or insurance broker. Some likely considerations are the general state of your health (for example, any known, recurring, health expenses), your overall financial situation and risk tolerance, and the degree to which the various plans and companies allow you to use your current or preferred doctors. Many (all?) health insurance companies can provide you with price quotes and booklets explaining their various products.
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