Changes to Guidestone's Health Savings Account

I've blogged previously about our move over to the Health Saver 2600, and the great advantage it has been to us. Not long ago I received a rather ominous letter from Guidestone warning me that the HS2600 was being discontinued and replaced with the new HealthSaver 2800. The language of the letter led me to believe that the changes would amount to a weakening of the benefits of the HS2600.

I guessed correctly.

Nevertheless, we're staying with the new HS2800 plan, for reasons that I will detail in this post.

The Current HealthSaver 2600

Under our current coverage, we have a deductible of 2600/5200 with 100% coverage for in-network care above that level. Our church provides the HealthChoice 1000 plan for pastoral staff, but agrees to buy the cheaper HealthSaver 2600 for us and deposit the savings on the monthly premium bill into our Health Savings Account. For this year that amount deposited into our Health Savings Account will top $2700. So, if we spend $2700 on health care out of our pocket, we actually don't spend any money out of our pocket, because we have $2700 that we used to spend on premiums sitting in a debit card account for us to use before we touch any of "our" money. And any of that $2700 that we don't spend really does become our money, to save until next year, or until retirement, accumulating in our Health Savings Account year after year until we use it on health care expenses. Our kids can inherit any of it that we don't spend. It's our money.

This year, there is no level of health care expenses at which the HealthSaver 2600 plan isn't a better deal for us than the HealthChoice 1000—no level of health care expenses where we aren't money-ahead for having the HS2600.

The New HealthSaver 2800

The HealthSaver 2800 features two primary differences from the HS2600. First, the deductibles have risen (as the name suggests) to 2800/5600. Second, (and most significantly) the plan no longer features 100% coverage once you have met the higher deductible. Instead, the plan duplicates the HealthChoice series model of 80/20 coinsurance to a maximum out-of-pocket expense after deductibles: in this case, 3000/6000. That, my friends, is a major difference! And it shows up in the numbers.

The chart given above depicts how much money we make by choosing the HS2800 instead of the HC1000 at varying levels of medical expense for the year. The blue line (generally the best case) represents the financial advantage of switching to the HSA plan if all of the medical expenses are incurred by one individual within the family. The red line (generally the worst case) represents the financial (dis)advantage of switching to the HSA plan if half or less of the medical expenses are incurred by the costliest individual in the family. If the costliest individual in the family represents 75% of our family's annual medical expenses, then the HSA advantage would fall halfway between the red and blue lines. You get the point.

This financial model includes some presumptions:

• It presumes that all of the money that we save on premiums is placed into our Health Savings Account.

• It presumes that all of the expenses given are "normal" medical expenses. In other words, none of the following "special" expenses:

  • "Wellness" care, covered at $25 per visit under the HC1000 and at $0 under our HS2800.
  • Prescription drugs, covered with a copay under the HC1000 and treated as normal expenses under our HS2800.
  • Doctors visits, covered at $25 per visit under the HC1000 and treated as normal expenses under our HS2800.

  And I recognize that this one is truly a false presumption, but failure to make it so complicates the math as to put the plans beyond comparison for me.

• It presumes that we start the year with a $0 balance in our HSA, which we aren't, but the comparisons become invalid if we're applying the benefits of previous years to this year's analysis.

So, in our case, the switch to the Health Saver 2800 is a "sure thing" if our health expenses for the year are anywhere from $0 to around $5400. From there through $17,800 of medical expenses for the year, we are exposed to a potential downside of $108 (if we have that level of medical expenses with no one person costing half or more of the expenses), with a potential upside of $1,332. From 17,800 to 21,000 our downside exposure remains the same, while our upside potential gradually increases to 1,972 bucks (where it stays through infinity). From 21,000 to 35,600 our downside exposure deepens from $108 to $2,828 (where it stays through infinity).

Shedding the math and boiling it down to real life: Unless multiple people in our family have major medical issues next year that put us into the hospital, the Health Saver 2800 remains an upside situation for the Barber family. And we've never had a year like that. Someday, no doubt, we will. But if that kind of year happens as frequently for us as one in every three years (and again, we've NEVER had a year like that), we'll still accumulate enough money in years one and two to more than pay for our losses in year three. We've decided to roll the dice. I re-enrolled tonight.

Am I disappointed in the changes to the plan? You bet I am. But the HS2600, as it turns out, was simply too good a deal to be true (at least for very long). Let's hope that the HS2800 enjoys a longer life. My thanks to the fine folks at Guidestone for providing us with such valuable options for our health insurance needs.