Wife and I Disagree About Health Insurance

Robert starts off this hour in Miami hey Robert welcome to the Dave Ramsey show Thank You Davis a pleasure to be on I really appreciate you take my call well thank you sir how can we help my wife and I who are calling an open enrollment and I'm a big believer in your teachings as far as the HSA plaque she wants to do the PPO now my thing is this whether you're in an HSA or a PPO you have to hit the deductible folks before they cover a hundred percent more

specifically I mean you need to get to I guess the max out-of-pocket now for the PPO the the deductible is lower for the HSA the deductible is a little higher but the max out-of-pocket is a little bit lower for the HSA mm-hmm where do you go with the HSA or the PPO you still have to pay that deductible and get to the max out-of-pocket level now my wife and I recently had a baby and they paid really

a hundred and thirty thousand dollars worth of bills but we didn't hit the max out-of-pocket and now she's on this she has this concept in our mind that we still need to go with the PPO because the insurance recently just paid so much for our child what I don't understand how they did that if we didn't hit the max out of pocket I can't get her to switch to the HSA which I know it's going to give us tax benefits at the end of the year based on the fact we're just happening with our child mm-hmm okay so

she doesn't want to switch because she feels like she owes the money since they just paid claims no no no she feels that it's more beneficial well it's not I don't I don't really care how you feel this is a math thing you don't need feelings I see the calculator yeah and so it's a it's a calculator both of them will cover your family and the only question is when you run out different scenarios which one's going to cost your family more now here are the here are

the two things that you can look at and this is the way the math will work if your family is very healthy and doesn't go to the doctor much at all then the HSA is a lower premium higher deductible and you're not going the doctor much at all and so it's going to be cheaper okay the HSA is also going to be cheaper because it has a very very low out-of-pocket once you make the deductible most of them cover a hundred percent d'azyr's I

think it's ten percent coinsurance okay up until what you know what your stopping until up until the max out of pocket is seventy three hundred on the HSA the stuff to pull it's four thousand as opposed to the PPO would where the doctor borders yeah they max out of pocket be a half million usually no yeah yeah I could be I mean what's your max out of pocket on your PPO on the PPO max out of pocket at 9 grand okay so there's a two thousand dollar difference so just

run the scenarios out under what circumstances and is that 80/20 on the PPO on the PPO I think yeah I'm pretty sure it's 80/20 yeah okay so twenty thousand dollars would get you of expenses would make the HSA anything above twenty thousand dollars would be cheaper anything under the deductibles would be cheaper the only time the PPO is going to be the best deal mathematically and you run these numbers now but this is the way it'll work is is

where see the two thousand dollar difference with your max out-of-pocket you got to make that up at 10 percent or 20 percent depending on with this PPO or HSA you got to run those right okay and that takes twenty thousand dollars to do that to get that covered because you've got a ten percent difference so you get two thousand dollars on ten percent so that's 20 grand okay so anything above 20 grand the the HSA is going to be cheaper anything under 20 grand down to the deductible the PPO is going to be cheaper so where are you going to have

the most of your events happen between five and twenty thousand above twenty thousand or less than twenty thousand if you have a sick child that's got chronic stuff and you're going to be spending a bunch of time in the hospital the HSA is going to be cheaper because everything after 20,000 you're making money on the HSA because it's at 10% rather than at 20 on the copay you see how did that like I've got a friend no it's a math thing if she refuses to discuss this based on math then we can't

have a discussion about it that's like we have a different issue now we have a marriage issue right okay because it's not a feeling thing because both of you want your family to be covered the only question is mathematically which is the cheaper okay I have a friend who has a child with chronic illness his HSA has saved him a bazillion dollars because he has a 50 100 dollar deductible and a hundred percent is paid after that he meets his deductible the first month of

every year so if you're not sick at all or you're sick all the time the HSA is cheaper it's if you're in the middle that the PPO is cheaper if you just want to go the doctor and have a $20 copay and go the doctor all the time and you're gonna live over at the pediatrician three times a month and you pay the $20 copay the PPO is probably going to come out better but like we hardly we knock on wood Ramsey's have not spent a lot of time in hospitals or doctors we've been really really blessed with health and so the HSA has saved me

a bazillion dollars because the premium is lower on it than it is on the PPO how much lowers your premium see the premium is 174 on the PPO but what I would want to do is to just put the wife's mind at ease I would put that same 170 for every pay period into the HSA so we can eventually get up to the point where we have the mass deductible I mean the max out-of-pocket that's that's a different discussion we're all we're talking about here is the insurance portion not the

savings portion so the HSA the premium is how much that's whatever we want to I mean I don't know not with nothing going into savings what is the health insurance premium like we're switching what Rose was this year went on high single HSA I put in forty four dollars every pay period we're switching to a probably could be technically listen you can't compare the savings element the savings element is an independent variable mathematically the savings element I'm going to do with so you've got to find out your premium if the

premium is 175 on 1 and the premium is a hundred on the other you have a $75 savings a month and that's what your and then you can offset that against the other now your if your deductible is a little bit higher you yes you can use the savings portion of the HSA and yes you do get a tax deduction and yes those do add benefits to the math but really it's an independent discussion because her concern right now because she's got a sick baby is do we have the money do we have an insurance coverage that's going to take care of my family and do

we have it most efficiently mathematically and so I don't need to appease her I'm not trying to appease her I want to have an honest intellectual mathematical discussion insurance - insurance and then she says okay I see that but I sure would feel better if we throw another hundred bucks into the HSA cool will do that to a but we've got to make the decision as a family based on math because that's all this is there's not one of these it's better quality than the other both of them are gonna get you good doctors both

of them are gonna tear your family