AARP Home » Health » Medicare & Medicaid »Health Savings Account...

Health Savings Account (HSA) Vs. Traditional Health Plan

This tool is designed to help you compare a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA) to a traditional health plan. By using an HDHP/HSA solution, you can often realize significant savings on your insurance premiums and receive a deduction on your income taxes. Use this calculator to determine the possible savings.

This Financial Calculator requires SUN's Java™ Plug-in. If you see this message you will need to download SUN's Java™ Plug-in. This can be done automatically by clicking the yellow bar at the top of your browser and choosing “Install ActiveX Control”.

Get the Java™ Plug-in!

For more information about this Plug-in please visit: SUN's Java™ Plug-in
For more information about these insurance calculators please visit: Insurance Calculators from KJE Computer Solutions, LLC

Definitions

Annual prescriptions

Number of prescriptions you expect to fill annually.

Annual doctor visits

Number of times you expect to visit the doctor's office annually.

Marginal income tax rate

Use the table below to help you choose the appropriate federal marginal income tax rate.

Filing Status and Income Tax Rates 2012 Caution: Do not use these tax rate schedules to figure 2011 taxes. Use only to figure 2012 estimates.
Tax rate	Married filing jointly or qualified widow(er)	Single	Head of household	Married filing separately
10%	$0 - 17,400	$0 - 8,700	$0 - $12,400	$0 - 8,700
15%	$17,400 - 70,700	$8,700 - 35,350	$12,400 - 47,350	$8,700 - 35,350
25%	$70,700 - 142,700	$35,350 - 85,650	$47,350 - 122,300	$35,350 - 71,350
28%	$142,700 - 217,450	$85,650 - 178,650	$122,300 - 198,050	$71,350 - 108,725
33%	$217,450 - 388,350	$178,650 - 388,350	$198,050 - 388,350	$108,725 - 194,175
35%	over $388,350	over $388,350	over $388,350	over $194,175

Source: Revenue Procedure 2011-52 http://www.irs.gov

Monthly premium

Monthly premium for your proposed health insurance options.

Annual deductible

Annual deductible that you are required to pay before your health insurance begins coverage. We assume that after this threshold has been reached that your insurance covers 100% of your expenses. In 2012, for an HDHP, the minimum deductible amount is $1,200 for self-only coverage and $2,400 for family coverage. This is unchanged from 2011.

Maximum annual out-of-pocket

Maximum out-of-pocket in a given year for your health insurance. This is the maximum total expense that you could incur in a given year with your proposed coverage. In 2012, for an HDHP, the highest annual out-of-pocket expense allowed is $6,050 for self only coverage and $12,100 for family coverage.

Co–pay for doctor visits and prescriptions

The fee you pay for each prescription and/or doctor's visit. These payments do not count toward your annual deductible or your maximum out of pocket expense.

Co–insurance

The percentage of your healthcare costs that your insurance will cover after your costs exceed your annual deductible. You are assumed to continue to pay this percentage of your healthcare costs until you reach your annual maximum out of pocket expense.

Other expenses

Any other expenses that would normally be covered by your health insurance. This would include lab fees and services other than prescriptions and doctor visits. Don't include medical expenses not normally covered by your insurance such as some elective surgery, contact lens solution or over the counter medications.

HSA contributions

Total you expect to contribute to an HSA account per year. All contributions to an HSA account are tax deductible and withdrawals for qualified medical expenses are not subject to income tax. For 2012, the maximum contribution to an HSA is $3,100 for self-only coverage and $6,250 for family coverage.

HSA current balance

Total amount you have in an existing HSA account. If you do not have an HSA plan at this time this amount should be $0.

Calculator
Definitions

Annual prescriptions

Number of prescriptions you expect to fill annually.

Annual doctor visits

Number of times you expect to visit the doctor's office annually.

Marginal income tax rate

Use the table below to help you choose the appropriate federal marginal income tax rate.

Filing Status and Income Tax Rates 2010 Caution: Do not use these tax rate schedules to figure 2009 taxes. Use only to figure 2010 estimates.
Tax rate	Married filing jointly or Qualified Widow(er)	Single	Head of household	Married filing separately
10%	$0 - 16,750	$0 - 8,375	$0 - $11,950	$0 - 8,375
15%	$16,751- 68,000	$8,376- 34,000	$11,951- 45,550	$8,376- 34,000
25%	$68,001- 137,300	$34,001- 82,400	$45,551- 117,650	$34,001- 68,650
28%	$137,301- 209,250	$82,401- 171,850	$117,651- 190,550	$68,651- 104,625
33%	$209,251- 373,650	$171,851- 373,650	$190,551- 373,650	$104,626- 186,825
35%	over $373,650	over $373,650	over $373,650	over $186,825

Source: http://www.irs.gov/pub/irs-drop/rp-09-50.pdf

Monthly premium

Monthly premium for your proposed health insurance options.

Annual deductible

Annual deductible that you are required to pay before your health insurance begins coverage. We assume that after this threshold has been reached that your insurance covers 100% of your expenses. In 2010, for a HDHP, the minimum deductible amount is $1,200 for self-only coverage and $2,400 for family coverage.

Maximum annual out-of-pocket

Maximum out-of-pocket in a given year for your health insurance. This is the maximum total expense that you could incur in a given year with your proposed coverage. In 2010, for a HDHP, the highest annual out-of-pocket expense allowed is $5,950 for self only coverage and $11,900 for family coverage.

Co–pay for doctor visits and prescriptions

The fee you pay for each prescription and/or doctor's visit. These payments do not count toward your annual deductible or your maximum out of pocket expense.

Co–insurance

Other expenses

HSA Contributions

Total you expect to contribute to an HSA account per year. All contributions to a HSA account are tax deductible and withdrawals for qualified medical expenses are not subject to income tax. For 2010, the maximum contribution to a HSA is $3,050 for self-only coverage and $6,150 for family coverage.