Wednesday, January 18, 2012

Big Gamble, Big Payoff!

I'm not one normally to belly up to the roulette wheel, but that's how I felt when I signed up for the new high-deductible health insurance plan and Health Savings Account last September.

The facts changed a little bit after I wrote that post, but here is how it played out.  Our family switched to a high-deductible ($6,000 per year) health insurance on September 1.  We had already met $1,500 of our deductible during the first 8 months of 2011, so we essentially had a $4,500 deductible for the remainder of the year.  My employer puts $87 a month in a Health Savings Account for us, and because of a glitch, I was putting in $1,025 per month for those last four months.  Switching to the new plan reduced my expense for family coverage by $225 per month, and I was able to remove the line for "medical expenses" from my budget since everything can come out of the Health Savings Account now.  It makes an even greater difference in the bottom line since it's all paid with pre-tax dollars now.

Honestly, I had to take a lot of deep breaths.  It was hard switching from the traditional co-pay for office visits and prescriptions to paying the whole bill (up to the deductible).  But I also knew that if I could pull this off, it would go a long way toward an orthodontist bill looming in my future.

The 10-year old and I went for an initial consultation back in October.  The orthodontist wanted her to lose at least four more baby teeth and said we could start the whole process within 1-3 years.  He quoted us a range of $4,800-$5,300.  Our dental insurance will cover $1,000 of that. But the thought of adding another $300-$350 monthly payment to our already tight cash flow was enough to give me heart palpitations.

As it all turned out, NO ONE had any emergencies during those four months.  We were able to pay for my husband's monthly prescriptions and a couple of office visits out of pocket.....and yes, we searched the internet and found an awesome discount for 12 months on his ADD medicine.  He was "encouraged" to get a CT Scan when he went in for a sinus infection, but decided against it knowing that we would be footing the bill for the entire procedure.  As it turned out, antibiotics took care of the sinus infection and the CT was really not necessary.  (Don't get me wrong.....I totally understand why physicians practice defensive medicine....I see their liability insurance premiums eat up a third or more of their collections).  But putting the choice to purchase medicine back in the consumer's hand puts an end to unnecessary tests ---- or at least it will in this house! my soapbox....end of the story is that my Health Savings Account now has a balance of $4,450.06. (Yes, it earns a few pennies of interest --- also totally tax free).  We started over with a brand new $6,000 deductible on January 1, and we will be contributing the maximum of $6,250 to the account during 2012!  I feel like I'm Home Free!!!

And that $4,450?  When the 10-year old gets the metal on her teeth, I can stroke a check for the whole thing!!  Is that awesome or what?

1 comment:

  1. oh my gosh, we did the same thing, only we started in January. It is scary to switch to the's the unknown. We have $3,000 sitting in the HSA with a $3,000 deductible for medical. We have a total of a $6000 deductible for medications, however, so we are on track to put a total of $6000 in.

    Still, very scary!