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How’d We Do on Healthcare?

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It’s the time of year we all step back and look at open enrollment options for healthcare.  We made the big decision to flip from a very safe HMO to a somewhat financially risky HSA last year.  You can see the post HERE.  I also included a helpful video in that post that outlines the basics of an HSA.  HSA’s are great but can be potentially risky financially if you have a big health emergency.  It’s a high deductible plan and if you don’t have the money, you run the risk of accruing debt.  If my family of 6 accumulated more than $3K in healthcare costs, it would come straight from our emergency fund.  Fortunately, HSA’s have a maximum out of pocket and we have more in our emergency fund than the maximum out of pocket so we decided it was a risk we were willing to take.

So how much did we accumulate in healthcare costs from the hospital?  $200. Yup.  That was it.  And we cash flowed it.  Buuuuuut…we did end up pulling $600 out of the HSA account.  Nope, not from a trip to the hospital.  Ugh.  My dental bills will always be the death of us.  I needed a root canal and a crown.  We now have roughly $2,400 in our HSA investment account we get to roll to next year.

And did I mention that money is invested and we’re EARNING INTEREST!?  Rock on HSA!

My husband and I sat down to look at our medical spending and run the risk analysis again for this year.  Our risk is even lower this year with the $2,400 we are rolling forward so it makes the most sense to stick with the HSA for another year.

I know it’s easy to ignore your health insurance options.  No one enjoys sifting through boring and somewhat confusing information but I encourage you to look into these choices as a possible way to save money next year.  Are you really in the best plan?  Could you do better?  Take a moment (ugh, or a few hours/days) and research your options.


3 Comments

  • Reply Angie |

    Way to go! As long as you can have low health expenses for 1-3 years while you max out your hsa an HDHP plan is great. We max our HSA out every year we’ve been eligible and have almost 70k in ours! It’s given me so much peace of mind when we were running on a low emergency fund. My plan is to leave it all invested in hopes to cover any major health expenses as we age. We will cash flow bills as long as possible to keep the stash growing mega tax free.

    • Reply Beks |

      I love to hear this! That is our goal as well! So glad to hear it’s working for you!

  • Reply Sarah |

    HSA funds are not only income tax free but also exempt from social security and medicare taxes. I’m not sure how it works if you contribute directly to an HSA account but if you have the funds pulled from your paycheck pretax, those funds are exempt of all taxes.

    If you can avoid using the funds now, you can use them for all sorts of medical expenses later – health insurance premiums, out of pocket costs when you retire, etc.

    It is a great deal if you have access to that kind of account!

So, what do you think ?