HSA+HDHI worth it for a resident?

[DeadCactus]

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Curious to hear the opinion of EM physicians and residents. Seems like free money until one bad cut or broken bone. The tax benefits don't see as strong with the (relatively) low income a resident makes. Then again, EM folks tend to be of the personality more likely to find themselves with cuts or broken bones.

Typical young, healthy single adult with no chronic medical conditions. Save about $150 on premiums a year plus $650 a year in employer contributions to the HSA. Max out of pocket is about $2000.

I guess at the end of the day you could make $800 or lose $1200, not that huge of a gamble. I'm leaning toward going that route, anything I'm missing?

 

[The White Coat Investor]

Curious to hear the opinion of EM physicians and residents. Seems like free money until one bad cut or broken bone. The tax benefits don't see as strong with the (relatively) low income a resident makes. Then again, EM folks tend to be of the personality more likely to find themselves with cuts or broken bones.

Typical young, healthy single adult with no chronic medical conditions. Save about $150 on premiums a year plus $650 a year in employer contributions to the HSA. Max out of pocket is about $2000.

I guess at the end of the day you could make $800 or lose $1200, not that huge of a gamble. I'm leaning toward going that route, anything I'm missing?

If you're a resident, you probably get very good health insurance from your hospital and an HSA isn't even an option for you. It certainly isn't as good an option as a resident as it is as an attending, given your lower income, smaller emergency fund, and lower tax bracket. It's still a wonderful savings account, however.

Here's the way I look at health care. I consumer very very little. I'm healthy, and most of the stuff I need I can do myself. If I need health care, it's going to be a big ticket item, almost surely more than my deductible. My family is similar. So I use a high deductible plan.

 

[DeadCactus]

They give us the option of a full health plan or an HSA+HDHI. On one hand I can get a great full-coverage health plan for a negligibly large premium. On the other hand, I can pocket $800 a year and don't really need great health insurance, just catastrophic coverage...

 

[Greenbbs]

They give us the option of a full health plan or an HSA+HDHI. On one hand I can get a great full-coverage health plan for a negligibly large premium. On the other hand, I can pocket $800 a year and don't really need great health insurance, just catastrophic coverage...

I had to have a lap chole emergently when I was chief resident. I had the hospital sponsored insurance and it cost me 250$ out of pocket. The last thing you want to do is have something like a lap chole or an appy or need some ortho procedure as a resident and have a HDHI plan and get stuck with a 5k deductible. That'll set you back more than you would know in residency.

 

[CrazyCPA]

You are actually at a good planning point right now. If you have a significant other that might be coming onto your insurance at some point in the next year or two, you should consider their health conditions as the HDHI plan may not be a good option for them. Also, once those monies are in the HSA, they cannot be withdrawn for anything other than medical expenses without being taxed and a 10% penalty (I'm a little rusty on these rules, but I'm pretty sure that's still correct). This is also true if you switch to a non-HDHI plan and spend the funds on most things, including non-qualified medical expenses. However, you can invest the HSA funds just like an IRA and watch the money grow (assuming your employer offers these investment options).

Also, if you happen to have an IRA, you can make a one-time nontaxable transfer to the HSA in order to establish a base in case of catastrophe.

I personally loved the HSA option at my last employer (especially when I was single). My current employer doesn't offer it, so I have a fair amount of money sitting in a HSA that I cannot use for at least the next 4 years.

Full Disclosure: I'm not a physician or resident, but I am a nontrad with some experience in the area.

 

[DeadCactus]

I had to have a lap chole emergently when I was chief resident. I had the hospital sponsored insurance and it cost me 250$ out of pocket. The last thing you want to do is have something like a lap chole or an appy or need some ortho procedure as a resident and have a HDHI plan and get stuck with a 5k deductible. That'll set you back more than you would know in residency.

Max out of pocket is $2000 and the employer is contributing $650 a year and there is a $150 savings in premium . So the most money I could lose in any one year is $1200. Granted a stream of bad luck and I could be losing $1200 every year but that seems extremely unlikely unless I develop some sort of chronic issue in which case I could switch to the EPO.

But you make a point, there is a security in knowing that I just have to pay a small copay for any care I need...

I personally loved the HSA option at my last employer (especially when I was single). My current employer doesn't offer it, so I have a fair amount of money sitting in a HSA that I cannot use for at least the next 4 years.

You can't withdraw the money to pay your co-pays and such?

 

[CrazyCPA]

You can't withdraw the money to pay your co-pays and such?

You can actually use it for certain things (I edited my above post to reflect that) that are qualified medical expenses. This does include copays for doctors visits and medications. I work at a large academic center and as long as I am using their services I don't have a copay. It's a really good plan as long as wait times and choice of physician is not too important to you.

Once you have accumulated some real money in there, it stinks to be unable to use it. I have my first medical school tuition bill coming up and I'd love to have access to that money without a penalty.

I've been out of the individual tax game for a while. My HSA knowledge is a little rusty. My apologies if that first post was a little misleading.