HSA advice

[JoshuaHeckathorn]

If you can find a plan that covers maternity, I'd still say go for it and save throughout the year in preparation for the birth. We're having our first this year too and my wife's HDHP/HSA not only covers maternity but has an annual max of $5K.

[jIM_Ohio]

What if you're going to have a child in your first year of being on the HDHP/HSA? Would you all still recommend the switch?

Maybe.

Depends on three factors

1) can you max out the HSA in year of birth? If no, strongly consider other insurance options.
2) will baby be born later in year (after June)? If you have the chance to add money to HSA before birth, this gives you some room to wiggle.
3) Do you have a decent sized emergency fund? If no, strongly consider another insurance option.

If you give birth you want insurance. If an HDHP is the only one you can afford, do it. If you have other options, you need to consider all of above.

Some fees will be "up front"- you need to pay them before baby gets treatment. Most of these treatments are rare, but as a parent of twins, I can tell you we had one of these rare cases TIMES TWO and we were on the HDHP and it cost us $7000 in 3 months.


If you have the typical pregnancy- take baby (babies) to term, give birth, go to pediatrician 4 times (new born-3 months-6 months-9 months) and a few other times when sick, HDHP will be fine.

If mother gets put in hospital before birth with complications, probably OK, but depends on treatment and you could go thru deductible real fast.
If kids are born early or have an extended hospital stay, a few days will burn thru whole deductible-
My kids were born on my wife's plan and were transferred to my plan when 9 months old. My wife was in hospital for 8 weeks before birth on bed rest and she cost $200,000 (plus or minus). My kids were born 3 months early. One had an 11 week hospital stay and that cost $300,000+. His brother spent 7 weeks at one hospital ($200,000+) then 6 weeks at another ($300,000+). You want insurance when giving birth. We paid maybe $300 for that whole treatment ($50 co pay for wife, for kid 1 hospital 1, for kid 2 hospital 1, for kid 2 hospital 2 and wife's second admittance to hospital). Had we been on HDHP we would have burned thru $7000 deductible in about 2 days.

So its best to plan to pay the entire deductible each year. If plan max is $7000, you need to budget to spend $600/mo on health care (put $450/mo of this into HSA and $150/mo into savings) to cover the $7000 of expenses.

If life happens and you need the $7000 you have it accounted for.
If no large bills are received, you can budget less the following year.
If you spend every penny you earn and save little before the HDHP, the health plan will cause you more problems than it solves. If you like to plan financially, it works GREAT. We have an HDHP, I have been on it 3 years, my family 2 years, and it works GREAT.