Like many Texans, Jerome is comparing health insurance plans during this open enrollment season. As he is looking for coverage for his family of three, he wants to make the smartest financial decision for his family. His wife has given input, but he is frustrated by all the jargon as looks at the plans. He knows that his son wants to keep his pediatrician that he has seen his entire life, but beyond that he doesn't anticipate that many medical expenses throughout the coming year.
The plan options he has looked at include terms like HSA-eligible plans, copays, and maximum out-of-pocket costs that feel overwhelming. Jerome is determined to figure it out and has considered calling an agent to help him. He knows that understanding the long-term financial impact is just as important as picking the right plan for their healthcare coverage today.
If you’ve felt the same way as Jerome, you’re not alone. Choosing the right health insurance plan, especially when balancing health care costs for a family, can feel like a maze. Jerome's wife wanted to explore why an HSA-enabled health plan might be a better choice than a traditional bronze-level health plan because of tax benefits. What did she know that he didn't, and how could it make a real difference for your finances as well?
Lower Monthly Premiums Free Up Cash for Savings
One of the first things Jerome noticed about the HSA-enabled plan was the lower monthly premium compared to traditional plans at the Bronze metal level. For example, a traditional bronze plan might cost $1,130 a month for his family of three before premium subsidies are applied. A similar HSA-enabled "high-deductible plan" comes in at $950. That $180 difference may not seem like much, but for Jerome’s family, it adds up to $2,160 in annual savings on the insurance premiums alone.
Rather than just pocketing the difference, Jerome liked the idea of using the extra cash to fund a Health Savings Account (HSA). This tax-advantaged account allows him to save specifically for healthcare expenses, giving his family more flexibility to manage costs throughout the year. By choosing a lower-premium plan, Jerome could shift his savings into something that worked directly for his family’s health while also providing a long-term health savings account. He liked the idea of planning for the future health expenses.
Total Cost of Risk: A Smarter Way to Calculate Financial Impact
Like most Texans, Jerome was worried about his deductible amount. But his wife correctly informed him that meeting a deductible wasn't the end all, be all. She recognized that they could still pay out of pocket expenses up to the max out of pocket. If they had major qualified health expenses, the out of pocket costs can escalate quickly on the Bronze plan they were considering.
With this in mind, Jerome didn’t stop at monthly premiums—he wanted to understand the full picture of costs. That’s when he learned about the total cost of risk, which combines the sunk cost of health insurance premiums with the plan’s out-of-pocket maximum (MOOP). For example:
- Traditional Bronze Plan: $1130/month premium + $9,200 MOOP = $22,760 total cost of risk.
- HSA-Eligible High Deductible Health Plan: $950/month premium + $8,250 MOOP = $19,650 total cost of risk.
By looking at the total cost of risk, Jerome realized that the HSA-eligible HDHP gave his family lower overall financial burden in a worst-case scenario by over $3,000! What’s more, traditional plans often require copays even after hitting the MOOP, meaning his family could face additional out-of-pocket expenses. With the HSA-enabled plan, Jerome could use tax-free HSA funds to cover qualified expenses, potentially saving even more.
Tax Advantages That Benefit Your Bottom Line
Jerome was intrigued when he learned about the triple tax advantages of an HSA. Contributions to the account reduce taxable income, any interest or investment growth within the account is tax-free money, and withdrawals for qualified medical expenses are also tax-free. This opened up a new way for him to manage healthcare costs while reducing his income taxes for the year. He absolutely loved this idea.
If Jerome contributed $8,550 (the annual contribution limit for families in 2025) to his health savings account, he would lower his taxable income by the same amount. At a 22% tax rate, that’s $1,881 in tax savings. Plus, any unused funds roll over year after year, allowing him to build a healthcare savings fund for the future. The traditional bronze plan offered no such benefit, which made the HSA-enabled option even more appealing.
Flexibility with Copays and Spending
Jerome also appreciated the flexibility that comes with an HSA-enabled plan. Instead of being locked into fixed copays for every doctor visit or prescription, he could use his HSA funds to cover expenses as needed. This approach gave him more control over how his family spent their healthcare costs, and he liked knowing that the funds came from pre-tax savings.
For example, if his son needed a $100 specialist visit, Jerome could pay for it using a tax-free distribution from HSA funds. This effectively reduced the cost of the visit by his tax bracket percentage, saving him money compared to paying the same bill with post-tax dollars under a traditional bronze plan.
Building Long-Term Savings for Healthcare
The idea of saving for future healthcare expenses sealed the deal for Jerome. With an HSA, he could create a long-term healthcare emergency fund that rolled over year to year and even allowed investment options that gave the money more opportunities to grow. He imagined how much his family could save over the next decade, especially as healthcare expenses increase with age. This was a big difference from flexible spending accounts he had used with his employers in the past.
Traditional bronze plans offered no way to build savings for future expenses, which meant Jerome’s family would always be starting fresh each year. By choosing an HSA-enabled plan, he was taking steps to prepare for both the expected and unexpected medical costs of his family while also saving money and receiving tax benefits.
Why an HSA-Enabled Plan Was the Right Choice for Jerome’s Family
After comparing the options, Jerome saw how much the HSA-enabled health plan could benefit his family. The lower premiums gave him room in his budget to fund an HSA, while the plan’s lower total cost of risk reduced his financial exposure in a worst-case scenario. The tax advantages and flexibility of an HSA only added to the appeal, allowing him to make smarter decisions for both current expenses and long-term savings.
He was thankful that he had contacted a health insurance specialist at Insurance For Texans. They had helped him understand the jargon in the policies and how he could use the plans to his advantage with their medical expenses. Jerome’s family isn’t unique in wanting to make the best choice financially and practically. An HSA-enabled health plan could be the right solution for your family, too.
If you’re feeling overwhelmed by health insurance options, like Jerome once was, it’s time to take a closer look. Click the button below to explore HSA-enabled health plans and find the one that works best for your family’s needs and budget!