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Benefit Cost Scenarios

A PPO Plan in Action

Here's a hypothetical example using a PPO plan in an everyday situation. These are examples of medical care expenses; actual costs may differ based on the specific care you receive, your provider's charges, and other factors.

  1. Sam has a sore throat and calls her PCP to make an appointment. After some tests and blood work, the provider diagnoses Sam with strep throat, and prescribes an antibiotic.
  2. Sam picks up the prescription at the pharmacy, and pays $50. She pays for the full price of the prescription because the deductible hasn't yet been met. Sam uses money from her HSA to pay for the medication.
  3. Later, Sam receives two bills for services provided by her PCP–$200 for the visit and $150 for the blood work. She uses money from her HSA to pay those bills. These expenses were applied toward the deductible.
  • Sam's cost to visit the doctor is $20, not $200, and blood work is $15, not $150, because Blue Cross covers 90% of the eligible costs. After Sam reaches the out-of-pocket maximum, Blue Cross covers all eligible costs.
  • Sam's prescription costs $10, since the generic prescription maximum copay is $10. After Sam reaches the out-of-pocket maximum, all prescription costs are covered.

Sam spends more upfront for services and has a higher deductible, but pays less per paycheck (compared to the HMO plan). The Blue Cross contribution to Sam's HSA is greater (compared to the HMO's HRA) and any money left over at the end of the plan year is rolled over into the next year, with potential growth from interest or reinvestment.

A HMO Plan in Action

Here's a hypothetical example using an HMO plan in an everyday situation. These are examples of medical care expenses; actual costs may differ based on the specific care you receive, your provider's charges, and other factors.

  1. Sam has a sore throat and calls her PCP to make an appointment. After some tests and blood work, the provider diagnoses Sam with strep throat, and prescribes an antibiotic. Sam pays a $20 copay, using funds from her HRA.
  2. Sam picks up the prescription at the pharmacy, and uses money from her HRA for the $15 copay.
  3. Later, Sam gets a $150 bill for the lab work. Since Sam hasn't met the deductible, she uses money from her HRA to pay the bill, which is applied to her deductible.
  • Sam still pays the $20 copay to see the doctor but no longer pays for lab work.
  • After Sam reaches the out-of-pocket maximum, the copayments are covered at 100%.
  • Prescription costs remain the same until Sam reaches the out-of-pocket maximum.

Sam pays less upfront for certain services and has a lower deductible, but pays more per paycheck (compared to the PPO plan). She receives a smaller contribution from Blue Cross (compared to the PPO's HSA) and can't contribute to the HRA. She also must see her PCP for visits and referrals.