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Meet "Jacob"

Jacob is age 50, married, no children. He is an existing VMware employee who switched from the Traditional PPO plan to the HSA PPO in 2018 and also covers his spouse, Roberta. Jacob and Roberta maintain good health with preventive medications and routine care from in-network providers. The following describes how the HSA PPO plan would work in 2018 for Jacob and Roberta.

  Premium (per paycheck) $54.02
  Coverage Employee + Spouse
  HSA Contribution by VMware $1,500
  Employee + Spouse deductible $3,000
  Coinsurance 10% for in-network medical services after deductible; 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

In 2018, Roberta turned age 50 and had a recommended colonoscopy. Jacob sprained his knee, which required an MRI and out-patient surgery. The following describes how the HSA PPO worked for Jacob and Roberta.

Services Used in 2018 Total Costs Amount paid from Jacob's HSA Amount paid by the plan Amount paid by Jacob Amount applied toward the $3,000 family deductible Amount applied toward the family OOP maximum
Annual wellness exams and lab test for Jacob and Roberta (in-network) $485 $0 $485
(100% covered preventive care)
$0 $0 $0
Colonoscopy (in-network) $1,905 $0 $1,905
(100% covered preventive care)
$0 $0 $0
One (1) doctor visit and two (2) Specialist visits (for non-preventive in-network) $570 $570 $0 $0 $570 $570
MRI and out-patient surgery for Jacob (in-network) $780 $780 $0 $0 $780 $780
Four (4) preventive formulary brand-name drug prescriptions filled at a network pharmacy $1,000 $150 $850 (85%) $0 Deductible waived $230
Totals $4,740 $1,500 $3,240 $0 $1,350 $1,580
Jacob's HSA balance at year end   $0        

Summary

  • By the end of the first year, Jacob and Roberta incurred $4,740 in medical and prescription drug expenses.
  • The plan paid $3,240. Jacob and Roberta used VMware’s $1,500 HSA contribution to pay for their doctor visits, outpatient surgery and part of the prescriptions.
  • Jacob paid nothing out of his own pocket towards these expenses and did not incur any other expenses for the year.

Jacob's and Roberta's total cost for the year with the HSA PPO was the annual premium of $1,296.48 ($54.02 per paycheck). See below for how much Jacob and Roberta 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 couple's year if they had enrolled in the Traditional PPO plan:

Services Used Total Costs Amount paid by the plan Amount Paid by Jacob Amount applied toward the $1,500 family deductible Amount applied toward the family OOP maximum
Annual wellness exams and lab test for Jacob and Roberta (in-network) $485 $485
(100% covered preventive care)
$0 $0 $0
Colonoscopy (in-network) $1,905 $1,905
(100% covered preventive care)
$0 $0 $0
One (1) doctor visit and two (2) Specialist visits (for non-preventive in-network) $570 $490 $80
(1 PCP copay of $20; 2 specialist copays of $30 each)
Deductible waived $80
MRI and out-patient surgery for Jacob (in-network) $780 $0 $780 $780 $780
Four (4) preventive formulary brand-name drug prescriptions filled at a network pharmacy $1,000 $750 (75%) $250 (25%) Deductible waived $250
Totals $4,740 $3,630 $1,110 $780 $1,110

Jacob and Roberta’s total cost for the year would have been $5,934.96 under the Traditional PPO plan, which includes the total annual premium total of $4,824.96 ($201.04 per paycheck) plus their total out-of-pocket cost of $1,110. Under the HSA PPO plan, their total cost for the same services is only $1,296.48, or a difference of $4,638.48!

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