The following is a staff writer post from MikeS. He is a married father of 2. So, with the cat, he ranks number 5 in the house. He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.
Three cheers for saving!! You generally cannot go wrong by saving money and in my case it helped rescue me from myself. I know the rules for managing your finances, but sometimes I am still surprised by them when they work. I have talked before that I was opening an HSA for this year and how the first month of the high-deductible plan went.
In opening the HSA and fully funding the account for the year, I kind of expected to have a decent amount leftover. I have tracked my medical expenses explicitly for the past 4 years. It started when I had to track all of my son’s bills after he was born. It was mainly to make sure we did not forget to pay anybody, but I have kept up with the process since then. I always feel that more information helps me manage our finances. So, going into this year I expected our expenses would run in the $3,000ish range. That’s based on what we spent the last 2 years roughly. I may not have as much left as I expected.
The first medical expense surprise that we got was my root canal. It turns out even with insurance, that root canals are pretty expensive. Between the crown that I needed and the root canal itself, the bills totaled $1,459. My dental insurance has a $1,500 payment cap for a given plan year and I easily hit that with both procedures. I wish I could say that will be my last root canal, but given the previous damage I have done to my teeth, more are likely in the future. I have some rather large fillings, that when they are replaced will likely result in root canals. The second and third surprises came from my son. It was nothing serious or life-threatening, thankfully.
The second was he simply needed a hernia operation. His 2 ½-year check-up revealed the problem in May. It was a simple surgery and we were in and out the same day. It did not seem to even bother him much, he was back to running around in a few hours. I certainly did not expect my 2-year old son to be having surgery this year, cardiologist check-up sure, but not surgery. His bills totaled up to $5,649, but because we had already hit our deductible for the year in April, our portion was only $565. The third surprise was some developmental therapy for him. He is a little behind where he should be and we have some therapists working with him to catch him up. Those bills will come out to be about $720. It is a state program, so thankfully I do not have to pay the full amount.
Benefit of Saving
When I was evaluating whether to go with the high-deductible plan with the HSA, I was I could say that saving for the unexpected medical expenses was the primary driver. I was more focused on utilizing my tax tools and increasing my tax savings and the long-term savings potential. As I said in the beginning, I was expecting to have around $3,000 leftover in the HSA to invest for the future. Thankfully by paying myself first, my finances have not been disrupted in the least. I can remember years ago when an unexpected doctors visit would cause me some anxiety about how I would cover the cost. Now, I can honestly say I did not even blink when any of the costs came up. Even if there are more surprises this year, the HSA can pay for them. Once the HSA is exhausted, we are not that far away from the out of pocket maximum for the health insurance. Three cheers for savings!!!!