Well, this year is turning out to be an expensive one, and we still have a long way to go.
Here is a list of some of my expenses for the year that I will be forced to pay soon, or have recently paid:
ACL surgery: $5,000 (that is our family’s health insurance deductible for the year)
Ice machine rental for knee recovery: $300
Physical Therapy co-pay: $480 (estimate)
Miscellaneous surgery related purchases: $200
Braces for my youngest son: $4200
College deposit for oldest son: $200
Grand Total: $10,380.
Ten grand is a lot of money to come up with all at once!
How I Plan To Pay For My Expenses
Well, the max we could save in our Health Savings Account (HSA) is around $6,000. However, that will not accumulate in time for me to pay my bills. The plan was to use that money for braces, but since I ended up having ACL surgery, we won’t have enough in our account to cover all the expenses. However, we did have $2700 in our Health Savings Account that rolled over from 2010. So, overall we will have $8700 to put toward our expenses this year. But, we will have to pay some up front and get reimbursed throughout the year as the balance in our HSA accumulates.
In addition, I have spoken with our orthodontist, who will give us a 7 percent discount on the my son’s braces if we pay with a check, but they are going to allow us to pay half this year and half next year, which is actually what brought our bill down to $4200.
So, in the next month, I estimate I will have to pay about $8200 in medical expenses, and I will have about $3200 total in the HSA to help cover the bills. So, I will have to pay $5000 from our ‘general fund’ to pay the balance. Ironically, that is about how much I will have accumulated in the HSA at the end of the year. That means that all the rest of our medical and dental expenses for the year will have to be paid outside the HSA.
I have said this a million times, but this is yet another example of why it is so important to have an emergency fund in place. (Or savings, whatever you want to call it.) When medical expenses come up, the last thing you want to worry about is how you are going to pay for it. It is much better when the financial aspect is more of a nuisance than a stressor and you can just focus on recovery instead.
Also, if you are able to participate in a Health Savings Account, really think about how much money you want to put into it each year. When in doubt, err on the side of over ‘investing’, since the money can roll over each year. (This is NOT true for Flexible Spending Accounts (FSAs), you must spend the balance during the same year it is saved.) I am so glad I had some money left over from the previous year that can be used for our expenses this year!
So readers, have you been happy with your Health Savings Accounts?