Health care spending accounts
Many plans also have accounts that you can set up to use to pay for care during the year. If you have a lot of out-of-pocket health costs, you might want to think about using a health care spending account.
The Out-of-Pocket Cost Tracker can help you use one of the health care spending accounts listed below. The Out-of-Pocket Cost Tracker is designed to be used on a computer with Adobe® Acrobat® Reader software, available here for free.
Health Saving Account (HSA)
- Only available for use with an HDHP
- Lets you add money from your paycheck before taxes; employers can contribute, as well
- Used to cover the out-of-pocket costs of care, such as prescription medicines
- Money in your HSA can be invested, the balance carried over from year to year if not spent, and it can be taken with you if you leave your plan or change employers
Health Reimbursement Arrangement (HRA)
- Sometimes called a personal care account
- You may only use for certain qualified expenses
- Similar to an HSA but your employer puts money in instead of you
- There may be a maximum on the value of an HRA
- Interest is not earned on an HRA, and the amount does not transfer if you leave your job
Flexible spending account (FSA)
- Funded by you or your employer
- Unlike an HRA, you get to choose what qualified expenses are paid for
- Money left at the end of the year may go back to your employer if not used
Follow along as different families pick a health insurance plan.
It's time to select a plan. Each of the people below are looking at their options for the year. They each have to think about their health care needs as they look at each plan. They also look at how much they will pay each month as a premium, whether their doctors are in their plan's network, whether their medicines are covered by their plan, and how much they might cost.
See examples of how each plan type might work out for the year for each of the families below. Note that these are just examples and do not represent what you might have to pay.
Michelle / Age: 28 / Status: Single, employed
Michelle is young, healthy, and employed. She only uses health services like routine checkups at her physician covered by her health insurance. In the winter, she gets strep throat and visits her physician who prescribes a medicine to help her get better.
- $100/month premium ($1,200/year)
- $2,000 deductible
- $4,000 out-of-pocket maximum
What Michelle Would Pay
- $1,200 in premiums
- $150 for doctor visit
- $60 for medicine
$1,410 total out-of-pocket costs for Michelle
After looking carefully at each plan, Michelle chose a plan that had the lowest out-of-pocket cost, based on the amount of health care she expects to need in the coming year: an HDHP.
Brad and Christine / Age: 32 and 33 / Status: Married, employed
Brad and Christine are healthy and have 3 young, healthy children. Insurance through Christine's employer covers the many checkups the family uses to keep them healthy throughout the year. They have a doctor that they love and would like to continue seeing her. On their vacation in August, the family is in a minor car accident and needs to be transported to a hospital and cared for before being released the same day.
- $450/month premium ($5,400/year)
- $3,000 deductible
- $4,000 out-of-pocket maximum
What Brad and Christine Would Pay
- $5,400 in premiums
- $4,000 for emergency services
$9,400 total out-of-pocket costs for Brad and Christine
After carefully looking at each plan, the total cost of care was not as important for Brad and Christine as being able to see their primary care physician. Even if they need a lot of care, the difference in cost is not a concern, so they chose to go with a PPO plan that allows them to see their preferred doctor, even though she is out of network.
Timothy and Heidi / Age: 53 and 49 / Status: Married, employed
Timothy and Heidi have health insurance directly through a private insurance company. Timothy has type 2 diabetes that requires regular appointments with his primary care physician and several specialists, lab tests, and prescription medicine.
- $600/month premium ($7,200/year}
- $5,000 deductible
- $6,500 out-of-pocket maximum
What Timothy and Heidi Would Pay
- $7,200 in premiums
- $280 in Rx copays
- $250 for testing supplies
$7,730 total out-of-pocket costs for Timothy and Heidi
Timothy and Heidi see the value in paying more each month for an HMO/EPO because it covers many of the regular services they use at little or no cost to them. After looking at each plan option, they decide that they would like to spread the cost of health care from month to month to avoid paying for each individual appointment, prescription, or test.