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Meet the "Brown" family

Vickie Brown is age 38 and recently hired by VMware. She covers her husband and two children under the HSA PPO. The Brown's use in-network providers to better manage their out-of-pocket expenses. The following describes how the HSA PPO would work in 2018 for the Brown family.

  Premium (per paycheck) $97.24
  Coverage Employee + Family
  HSA Contribution by VMware $1,500
  Employee + Family deductible $3,000
  Coinsurance 10% for in-network medical services after deductible; including 10%/15%/20% (generic/brand/non-formulary) for prescription drugs, after deductible
30% for out-of-network services, after deductible
  Preventive Rx coverage 10%/15%/20% (generic/brand/non-formulary, deductible waived), for preventive prescriptions filled at a network pharmacy
  Out of Pocket Maximum $5,000 for in-network services
$12,000 for out-of-network services

Over the course of 2018, one of the Brown children hurt her wrist – requiring an emergency room visit, two doctor visits, one generic prescription and two non-formulary prescriptions. Vickie's husband filled three (3) mail-order generic prescriptions to manage his blood pressure. Over the course of the year, the family had five (5) other doctor visits. And, Vickie delivered a healthy baby boy.

Services Used in 2018 Total Costs Amount paid from Vickie's HSA Amount paid by the plan Paid by Vickie Amount applied toward the $3,000 family deductible Amount applied toward the family OOP maximum
Annual wellness exams and lab test for Vickie and her spouse, well-child exam for her daughter (in-network) $605 $0 $605
(100% covered preventive care)
$0 $0 $0
ER visit (in-network) $2,024 $1,500 $0 $524 $2,024 $2,024
Seven (7) in-network doctor visits (non-preventive) $1,823 $0 $762.30 (90% of $847 after deductible has been met) $976 to meet the deductible + $84.70 (10%) $976 $1060.70
One (1) generic prescription filled at a network pharmacy $28 $0 $25.20 (90%) $2.80 (10%) N/A $2.80
Two (2) non-formulary prescriptions filled at a network pharmacy $163 $0 $130.40 (80%) $32.60 N/A $32.60
Three (3) generic mail-order prescriptions for a chronic medication $445 $0 $400.50 (90%) $44.50 (10%) N/A $44.50
Hospital and maternity support for Vickie (in-network) $7,610 $0 $6,849 (90%) $761 (10%) N/A $761
Totals $12,698 $1,500 $8,772.40 $2,425.60 $3,000 $3,925.60
Vickie's HSA balance at year end   $0        

Summary

  • In 2018, the Brown family incurred $12,698 in medical and prescription drug expenses.
  • Vickie paid $2,425.60 out of her own pocket ($1,500 to complete the deductible + $925.60 for her share of the medical and prescription drug costs).
  • Vickie used VMware’s $1,500 HSA contribution to pay for doctor visits, outpatient surgery and part of the prescriptions. The plan paid $8,772.40.
  • Vickie depleted her HSA, so there was no balance at the end of the year.

The Browns' total cost for the year with the HSA PPO was $4,760 (total annual premium + their out-of-pocket costs). See below for how much the Browns would have spent had they enrolled in the Traditional PPO plan.

How would this experience have differed under the Traditional PPO Plan?

Here's a look at the Brown family's year if Vickie had enrolled in the Traditional PPO plan:

Services Used Costs Paid by the plan Paid by Vickie Amount applied toward the $1500 family deductible Amount applied toward the family OOP maximum
Annual wellness exams and lab test for Vickie and her spouse, well-child exam for her daughter (in-network) $605 $605
(100% covered preventive care)
$0 $0 $0
ER visit (in-network) $2,024 $1,731.60 $100 copay (deductible waived) + $192.40 $0 $292.40
Seven (7) in-network doctor visits $1,823 $1,683 $140 (7 PCP copays, of $20 each) Deductible waived $140
One (1) generic prescription filled at a network pharmacy $28 $0 $28 $28 $28
Two (2) non-formulary prescriptions filled at a network pharmacy $163 $0 $163 $163 $163
Three (3) generic mail-order prescriptions for a chronic condition $445 $0 $445 $445 $445
Hospital and maternity support for Vickie (in-network) $7,610 $6,071.40
(90%)
$864 to meet deductible +
$674.60 (10%)
$864 $1,538.60
Totals $12,698 $10,091 $2,607 $1,500 $2,607

Vickie’s total cost for the year would have been $9,576.36 under the Traditional PPO plan, which includes the total annual premium total of $6,969.36 ($290.39 per paycheck) plus their total out-of-pocket cost of $2,607. Under the HSA PPO plan, their total cost for the same services is only $4,760, or a difference of $4,816.36!

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