I am an unusually healthy person and only go to the doctor for annual checkups. I rarely get sick and I have a high pan tolerance so when I do get sick or injured (think: The Haunted House Incident), I often muscle through it. It’s a source of pride for me if you can’t tell. This makes me a perfect candidate for a High Deductible Health Plan.
My husband however is not so lucky. He has a medical condition that has been ignored for years: a dangerously low heart rate. Recently, he failed a physical because of it. His heart was beating a mere 32 beats per minute, and he was advised that he is at Stage 2 of having a heart attack. Stage 3 is heart attack and possible death. He went from getting a standard physical for an exciting new opportunity to a scary reality check. We cannot ignore this anymore.
I dealt with this news by becoming angry which is my usual method of adjusting to a stressful situation: Anger, Defeat, Acceptance, and then eventually Planning.
To be completely honest, this has always been my worst fear since starting out becoming financially secure, attaining good credit, and buying a home.
I am reading a book called The 9 Steps to Financial Freedom by Suze Orman, and she advised us to address what we are afraid of. I am afraid I’m going to lose everything. The one thing I see that could wipe us out is a medical emergency resulting in medical bills we can’t afford, debt, collections, law suits, bad credit, financial ruin, AH!
My husband and I ran numbers a few years and found that we were both better off paying for our insurance individually. Since I enjoy good health, I have been part of a HDHP for a couple of years now. In 2017, I contributed $500 to my Health Savings Account in order to get a maximum $250 match from my employer. I used the savings for medical, dental, and vision bills for my family, and any bills above the $750, I contributed after tax dollars and deducted that from our income at tax time.
Even though I am the only person covered on my plan, I am still able to pay for bills for my spouse and my dependents.
Knowing all of this, and having this medical scare for my husband brought out the planner in me.
I have mentioned before that every debt free journey is going to be personal because we are dealing with personal finance. This is another way that I am tailoring our debt free journey to our specific needs. A medical emergency scares the living daylights out of me. I don’t want to hide anymore. I don’t want my husband to go on pretending he is healthy only because his condition hasn’t become serious enough to affect his daily life yet because in reality, eventually it will and waiting will only make it worse.
We are going to do what we can with what is available to us and start preparing for the bills that are coming as he gets his work up done by his cardiologist. I’m going to decrease my take home pay in order to increase my HSA contributions.
I have read that a good rule of thumb to contribute each year to an HSA is the amount of our deductibles. My deductible is $1,750. His is $2,500. Yes, that’s right. My unhealthy husband is in a high deductible plan. We will have to fix that coming up! More about that later.
Since I am the only one covered on my HDHP Plan, the most I can contribute is $3,450 even though our deductibles add up to $4,250.
Now, I know that we could use that $3,450 a year to pay off debt and keep going on our merry way, but like I said this medical issue needs to be addressed and it needs to be worked in to the budget. This is how we are going to do it. Maybe it’s a little wacky, a little doomsday if you will, but it makes me feel worlds better. We will be adding the HSA balance as an asset account in our Statements of Net Worth Updates beginning in March 2018.
Here are some notes from a little research I have done.
2018 limit is $3,450. After age 55 you can contribute $1,000 catch up.
Only I am covered on my HDHP, but I can pay for medical, dental, and vision bills for my husband and children. Hearing is covered as well.
Unused money rolls over year to year and is able to be invested once your account exceeds $1,000 (I plan to keep the amount of our deductibles as a “cash reserve” before investing in a mutual fund).
If I leave the plan, I still own the money but I can’t contribute any additional funds.
All contributions (matches from employer, gifts, after tax additions, and pretax additions) all count toward the maximum annual contribution.
After age 65, you can withdraw the funds for any reason just like a 401(k).
I am not eligible for an HSA if I have other insurance in addition to my HDHP.
A Happy Ending
Remember that failed physical? Well, the cardiologist declared my husband healthy enough for the opportunity which brought him to the Medical Center for his drug test and physical in the first place!
He has a new job training to be a manager with a competing company. This is a life changing event, so you can bet your bottom dollar I will be pouring over his medical plans and not letting him go in to a HDHP again!
I hope you learned something from our experience and my notes above.
Thanks for reading.