Last month we switched our health insurance to an HSA (health savings account) qualified plan. We’ve always had a high deductible, we just had to get a policy that was officially HSA qualified. We got a $3000 deductible, but it’s for both of us together, and the policy covers 100% after the deductible. Our old policy had a $2500 deductible each, and then another $2000 out-of-pocket each if we had a big claim. So our worst case scenario has dropped from $9000/year in out-of-pocket expenses, to $3000. We pay more for the policy, but my job is reimbursing us for the premium. They’ll reimburse up to $250/month, and the policy costs $242/month. Sweet.
Now that we have an HSA qualified health plan, we were able to set up a health savings account. We got one with Saturna Capital, which allows us to put the money in a mutual fund while it sits there. The idea is that we can put money into the HSA – all tax deductible – and let it grow until if and when we have a medical expense. Then we can use that money to pay medical bills (even things that aren’t covered by our health insurance policy), and it’s still tax-free. We’re hoping to have a baby in the next year or so, and we’re planning to use HSA money to pay the midwife. We want to have a home birth, so nothing would be covered by insurance, and the midwife charges $3000. So our little HSA needs to do some growing (we put $100 in to open the account). Right now we’ve committed to $100/month, but we’ll kick that up to $200/month later this year. Even though we still have a long way to go towards the $3000, it feels good to just have the account set up and know that some money is going into it automatically every month. And it will be great to pay that $3000 with pre-tax money… we’re in a 25% tax bracket, so it’ll save us $750 in taxes to pay with HSA money instead of checking account money. Now we just have to hope that we continue to stay as healthy as we’ve always been, so that we don’t have to dip into the HSA for anything besides a baby!