How Did My Health Savings Account (HSA) Perform Last Year?

As I posted about a couple of times last year, I switched over from a traditional health insurance plan to a High Deductible Plan with a health savings account ( HSA) for the 2008 calendar year. I had grown tired of paying large premiums year after year, so I decided to give it a try. How did it work out for me and my family in my first year? Pretty well, as far as I am concerned.

A little background information

Since my wife and I have 2 children, I was a little unsure of how it would work, as far as the numbers go. Kids get sick all of the time, and since they are in preschool and daycare, respectively, there is always a chance they can catch something from one of their classmates. I would be responsible for the first $2500 directly out of pocket (using the HSA account, though), and 10% from $2500 to $4000. I decided, since I had a chance to come out ahead, to go ahead and try it out.

The numbers from 2008:

I put in about $4000 last year, of which about $2500 was the difference in monthly premiums, so I would be “even” with the year before (what I spent on premiums only) with that amount. I had also put in about $1000 into my flexible spending account in previous years, so that got me up to $3500. I increased my contribution another $500 to hit the $4000 max out of pocket.

At the end of the year, (or actually, after I got all of the bills from the kids going to the doctor in December-they both got sick multiple times and made several trips), I had about $2800 left in the account, which means I spent about $1200. If you add in the extra $500 I put in (which was above what I spent the year before), I still came out about $2300 ahead, which was more than I had anticipated. I can say that my family and I were pretty lucky, and it is probably true, but it was also probably somewhat of a typical year.

Some of the things I learned over the year:

• Some drugs are real expensive, like $150 for eye drops. Others, if there is a generic available and the doctor prescribes a generic, can be really cheap, like $5.
• Doctor’s visits and others are not as expensive as I would have thought when you pay the bill yourself. Now this is because the insurance company still uses negotiated rates, (as opposed to if I was uninsured), but the negotiated rate was about $75 when my kids went for an office visit, and if you subtract of the $20 co-pay I used to have to pay it dropped it to about $55 difference from the year before.
• It did not, as some people might worry about, make me  or anyone in the family “not” want to go to the doctor if we thought we needed to.
• It did make me think more about my health care costs, and think about cheaper alternatives, mostly with prescriptions or other medicines.

Now I know there is always a chance I will max out on my expenses every year, but I do think an HSA health plan gives you the opportunity, at least, to keep a little more money in your pocket than a  traditional health insurance plan. The HSA has some outstanding benefits as well, for long term savings and investing.

If you want to learn more check out my first post about HSA Plans or the 2nd one on the status of my HSA after about 6 months .

Similar Posts:

• Mid-Year Update on My Health Savings Account (HSA)-How is it working?
• The Health Savings Account (HSA) and Can I Do Better Than a Health Insurance Company?
• 31 Ways to Save on Health Care and Medical Costs
• Your Health and Money- Save Money by Living Healthier

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