PPO vs. High Deductible Plans: Which One Is Right for You?

As someone who has saved thousands of dollars on their medical bills by knowing HOW my health insurance works, this is one of the most common questions I get asked. Should I pick between my employer’s PPO plan or High Deductible plan? 

In this blog, we will discuss how I confidently decide which plan we choose for our family, some of the big benefits and risks between PPO and High Deductible Plans, and how YOU can choose the right health insurance plan for you and your family!

Choosing the right health insurance plan for my family:

I’m so grateful to have amazing health insurance offered by my employer. Even with great plan options, I re-evaluate our family health insurance every year (and each time we have a qualifying life event which allows us to change our health insurance elections).  

This week, someone asked me which is the “better” plan. A High Deductible or PPO? The answer to this question really depends on how much risk someone is willing to take or willing to feel throughout the year!

Personally, I am not a risk-taker. I also HATE getting a big medical bill at the start of the year with a high deductible plan. As a parent of tiny humans, I like knowing exactly how much I will pay for a visit at their pediatrician when I take them in for a sick visit to their pediatrician (a $20 co-pay) and a trip to the urgent care for an x-ray ($30). And lately... there are lot of "here and there" visits.

I don’t want the cost of their care to influence my decision making in their care. Some people are really good at being able to separate the two, but sometimes I think this can skew my decision making (27% of American adults skipped or delayed medical care in 2023 due to the cost according to the Federal Reserve)! Co-pays in PPO plans give me so much peace of mind.

On the other end of this, there are some “cons” to choosing the PPO plan. We lose out on employer contributions to an HSA (a tax-advantaged savings account for High Deductible plans)! Instead, we contribute to an FSA account, but I don’t always max it out since FSA funds can only be used for the calendar year they relate to (aka use it or lose it). 

Let's dive in!

Enough about me… lets talk about how YOU can choose between these two types of plans for you and your family! Also… if you are not confident with all the health insurance lingo mentioned above, you should be! I created a free training that helps you confidently understand these terms (and more)! Register for the free training “3 secrets to confidently save on medical bills” here!

Benefits to Consider: 

PPO Plans - 

• Potentially higher premiums (cost you pay for the plan)
• Lower individual/family deductible (insurance starts paying faster)
• FSA eligible - set aside pre-tax dollars for medical expenses in the year they occur
• Takes longer to meet out-of-pocket max for families paying mostly co-pays for medical expenses

High Deductible Plans - 

• Potentially lower premiums (cost you pay for the plan)
• Higher individual/family deductible
• HSA eligible - set aside pre-tax dollars for medical expenses
• Many employers contribute “seed money” to their employees' HSA accounts who select this type of health plan to help with the cost of meeting the high deductible.

Risks to Consider:

PPO Plans - 

• FSA eligible - funds do not roll (use it or lose it)
• Not everything is subject to a co-pay and it depends how your provider bills visits. For example, a trip to the emergency room could be a $150 co-pay, but the labs and inpatient stay following could be subject to your co-insurance (which means you will owe a % of the contracted rate between the provider and insurance company). 
• Out of Pocket Maximum - always compare this to the high deductible plan since this could be a larger decision factor for some than others. 

High Deductible Plans - 

• High deductible - as contracted rates between health insurance companies and providers rise, your co-insurance (your responsibility) continues to rise. For example, a $500 visit with 20% co-insurance is still $100. 
• Out of Pocket Maximum - always compare this to the PPO plan since this could be a larger decision factor for some than others. 

How you can choose the right health insurance plan for you and your family: 

• Choosing between health insurance plans can feel overwhelming. Asking yourself these questions can help you choose between a PPO and High Deductible Plan

1. What are the benefits you like about each plan (see above)? 
2. What are the risks you don’t like about each plan (see above)? 
3. Compare the premiums, co-insurance, deductibles, and out of pocket max (grab your benefits packet from your employer to review)
4. What does our family typically pay for in medical expenses (sick visits, urgent care visits, ER visits, inpatient stays)?

Thinking ahead pays off!

This year, both of my children had visits to the ER and one had an inpatient stay. Not to mention my labor and delivery expenses that are quickly approaching! I’m SO glad I thought hard about which health insurance plan worked right for my family ahead of time so that I could avoid unnecessary stress throughout the year! If you want to learn how to save money on medical bills, avoid hours on the phone, and be prepared when health issues arise, enroll in Medical Bill Academy and learn from a mom who has saved thousands of dollars on Medical Bills!