Over the last ten years, my family has incurred well over $300,000 of medical bills – births, broken wrists, malpractice, sick kids, MRIs – it all adds up.
In my family budget, I include my premiums ($7,872) and my entire deductible ($7,500). We fund our deductible via our HSA ($6,550 family contribution limit in 2014) and top up when required. The HSA is funded automatically each month so I’m forced to save that money. Most US Bank’s have a subsidiary that can help you set up an HSA.
$15,000 per annum is a lot of money but most years, we “save” a dollar for each dollar we pay out.
- $18,500 retail price became $8,500 after discounts given to my insurer
- $8,500 bill blew through our deductible so we received a $7,500 invoice
- We had previously saved $5,000 in our HSA so…
End result… I write an unexpected check for $2,500 instead of $18,500.
Health insurance offers up some benefits:
- Cap our potential liability
- Access the discounted rates offered to our insurance company
- Pay automatically (direct debit insurance payments and HSA contributions)
Sidebar: work with health benefits would be a valuable addition to our family. A decent health plan could save us $15,000 per annum.
My next investment is a long-term care policy – about $5,000 per annum for the two of us. Even though the likelihood of payout on the policy is remote – for now – the policy gives me a lot of comfort in case tragedy strikes my wife, or me.
If I couldn’t afford my retirement investments then I’d skip the long-term care insurance, it has a low expected return on investment.