Why I Chose an HSA PPO Over a Regular PPO — And Haven’t Looked Back
It’s November, which usually means open enrollment time. This is the time that we should all take a few minutes to look over our options and evaluate if now is the time to make a change to our health insurance benefits. I made the switch to an HSA plan a few years ago as my employer was incentivizing this option and it was an opportunity for me to grow a tax deferred account similar to my 401k. I haven’t looked back after this change - and would encourage you to really think about this option as a long-term wealth building benefit.
What is an HSA you ask? Health Savings Accounts (HSAs) were first introduced in the United States in 2003 as part of the Medicare Prescription Drug, Improvement, and Modernization Act, which was signed into law by President George W. Bush. They were created to help individuals with High Deductible Health Plans (HDHPs) save money, tax-free, for qualified medical expenses — and over time, they’ve become a powerful wealth-building tool for savvy individuals. An HSA PPO usually costs less each month, but you pay more up front when you go to the doctor — unless you’ve built up your HSA account balance. A regular PPO has higher monthly costs but covers more before you hit your deductible. One helps with cash flow, the other with predictability. One requirement of an high-deductible health plan (HDHP) you will need to be aware of is you can’t have other non-HDHP coverage (like a regular PPO or a spouse’s plan that disqualifies you).
I made the switch mostly because it was mentioned that you could see similar growth like your 401k but unlike a Flexible Spending Account (FSA) the unused HSA funds would roll over from year to year — there's no “use it or lose it”. I went out and did my research and noticed that when I tallied my monthly premiums and compared the potential for total out of pocket, the costs were very similar. And since I was mostly healthy I got to thinking… why not choose the option for roll over dollars compared to paying upfront for all the PPO dollars and then not having anything left at the end of the year if I didn’t get sick? With an HSA it was a little less for premiums and I had to pay more up front from my pocket when I went to the doctor, but in the long run most of the dollars stayed in the HSA and started to grow with my HSA investments. So I decided to switch and put all the regular PPO dollars I used to have withheld into my HSA so I could set aside more contributions, and I made a conscious decision to keep the funds in the HSA and just cash flow the smaller doctor visits and if needed I use the HSA funds for larger medical bills. And as I got older I realized my HSA can be used in retirement to pay for Medicare premiums, long-term care, and other qualified expenses — tax-free! More reasons to just leave it alone.
I do agree that when switching to a HSA PPO that first year can be nerve racking because you are getting used to something new. There could be a lot of stress if you don’t have a “medical” emergency fund to rely on, so definitely include some thoughts on how you could pay some out of pocket bills those first few months. My best practice recommendation actually would be to try to set aside a sinking fund equal to your deductible just in case you reach that limit unexpectedly. This HSA option may not be ideal for you if you expect to have high medical expenses and no opportunity for savings or to cover the cash flow. You will have more reliability with a regular PPO - each of us should evaluate our own lifestyle and risk tolerance.
If you do decide to select an HSA PPO, here are a few steps to maximize your choice:
Contribute the annual maximum per the IRS guidelines (or as close as possible).
Use it as a long-term investment tool (not just savings for the current year).
If you do pay out of pocket for labs, prescriptions or doctor visits; keep your receipts for potential reimbursement from your HSA account at a later date.
Get familiar with your HSA online account, you will typically need to keep a certain amount as “cash on hand” but once you exceed that limit go in and start investing. If you need help deciding, have a conversation with your financial advisor or learn more from Nerd Wallet.
Having my HSA just in case of a medical catastrophe has me so grateful that I made this choice, but most importantly I really haven’t needed it due to my health so my balance has continued to grow by leaps & bounds because the funds roll over. I know this account will provide me with a significant boost when I retire to help pay my medical bills and that gives me peace of mind. If you want to take a look at HSA Bank Health Plan Comparison Calculator for examples, I recommend you also visit your HR website for reference material specific to your employer offered plans. You can also.
Most people don’t change their health insurance benefits - don’t let that be you. There is a quote from Meister Eckhart: The price of inaction is far greater than the cost of making a mistake. Your time is right now to explore your options, and if you feel overwhelmed because the benefit selection is coming up quickly, then I encourage you to take 2026 to perform more investigation so you will make a more informed health care selection next year. If you’re unsure how to start, reach out to me and schedule a free 45-minute clarity call to strategize and help move you from uncertainty to clarity and full financial power.
Additional reference material: Fidelity: 6 Surprising HSA benefits and HSA Bank article HSA v FSA
