Monday, November 19, 2018

How We Used Our HSA To Pay For A Medical Emergency


It Started With A Stomachache


One early morning last March, my son shuffled into our bedroom, his hands clenched to his abdomen.

"Mom," he whispered. "Mom. I don't feel good. My stomach hurts. Can I stay home today?"

"Mrrrph," I said from beneath the covers, wondering how long it'd be before I'd be cleaning up puke off the bathroom floor.

Three hours later, I was about to log into a conference call with my boss when I heard an odd, gut-wrenching moan from across the house. Parental alarm bells went off in my head. I hurried into the Kiddo's room to find him curled up in a ball on the bed, his skin pale, his face scrunched up in pain. 

I cancelled my meeting and we headed to urgent care, where the doctor took one look at him and announced that we'd need to go straight to the ER.

The verdict: a classic presentation of appendicitis. By 8 PM that evening, the Kiddo was in surgery. By 9 PM, he was enjoying a popsicle in the recovery room. By noon the next day, we were on our way back home with instructions to let him rest for a week. Two weeks later, he met with the surgeon and received a clean bill of health.

All in all, it was a sudden but relatively short-lived emergency, and we quickly returned to life as usual... until the medical bills started rolling in.

A Hit To The Old Bank Account


As anyone who lives in the United States and has encountered a medical emergency knows all too well, the aftermath of a hospital visit looks something like this - but with demands for payment instead of invitations to Hogwarts:


via GIPHY

Once the bills started showing up in our mailbox, they just kept coming. For months.

Our 30-hour medical emergency generated bills from the following providers and offices:

  • Urgent care
  • Ultrasound technician
  • Ultrasound analysis
  • Pathology
  • ER services
  • ER doctor
  • Surgeon
  • Anesthesiologist
  • Nurse anesthetist 
  • Use of operating room
  • Use of recovery room
  • Follow-up visit with surgeon
  • Hospital stay

Luckily, I have health insurance through my employer, so we weren't responsible for the full amount. But because I have a high deductible health plan with a family deductible of $2500 and an out-of-pocket maximum of $7000, we were still on the hook for thousands and thousands of dollars. 

Did we have thousands and thousands of dollars saved up?

Nope, sure didn't.

We evaluated our options:

-Call providers and ask for a big discount. If you ever get hit with a medical bill, you should absolutely request a discount. Just know that results vary widely. When my son was born via C-section, we didn't have insurance. That was fun. On the bright side, the hospital was willing to chop off a huge portion of the balance if we paid in full (which we were able to do with my parents' help). This time, though, we negotiated only 10 percent off the total. The remainder was still too high for us to pay outright, so this option was a non-starter.

-Pay with a credit card. We may have done it for the points had we had cash on hand, but since we knew we couldn't pay it off right away, the credit card route was a great big NOPE.

-Request a payment plan. Ultimately, this is what we ended up doing, and with the help of our HSA, it was a relatively painless choice. Even if you don't have an HSA, I highly recommend that you do this. I've heard that hospitals will generally agree to proposed terms of payment, at low or no interest, as long as you are paying something each month.

HSA To The Rescue


High deductible health plans kind of suck, but one of their few redeeming qualities is that many of them come with a health savings account, or HSA. You (and possibly your employer, if it's an employer-sponsored plan) contribute money to the account, which rolls over from year to year and is yours to keep forever. Not only are your HSA contributions tax-deductible (up to $3500 for an individual and $7000 for a family in 2019), once you reach a balance threshold, you can invest your HSA cash and earn tax-free interest. Woohoo!

Anyway, when my son ended up in the hospital, I'd been at my current job for only a couple of months and had only a few hundred dollars in my HSA. But I was still able to use my HSA to pay all of our medical bills with little impact to our monthly budget. 

Here's how we did it:

1. I made a list of healthcare providers and how much we owed to each of them. 

2. I reviewed every bill carefully and contacted the insurance company and providers to discuss apparent errors. Have I mentioned that I hate talking on the phone? This part was challenging for me but ultimately worthwhile. In a couple of instances, the providers made some... interesting billing choices, and the insurance company stepped in on our behalf. We saved a few hundred dollars in the process.

3. I paid off some of the smaller bills with the money I'd already saved in my HSA. I did this for organizational and motivational purposes: eliminating a few bills right off the bat made me feel like I'd accomplished something. It also meant I had fewer accounts to keep track of.

4. I maximized my HSA contribution. I calculated how much my employer would contribute in 2018 (close to $2000), figured out how much I'd need to chip in to meet the HSA maximum, and adjusted my biweekly HSA contribution accordingly. It did make a dent in my paycheck, but not an exceedingly large one. The fact that contributions are tax deductible made it an easy choice. I'll be maxing out my HSA contribution every year from now on.

5. I participated in my company's wellness incentive program. Many big companies have programs like this. Basically, you accrue points by completing a bunch of health-oriented tasks - getting a flu shot, scheduling a yearly physical, participating in a sport or other healthy activity - and when you earn enough points, you receive a discount on your monthly premium or some extra HSA cash. In my case, my company deposited an additional $500 into my HSA upon my successful completion of the program. I used this windfall to pay off the anesthesiology bill.

6. I calculated how much money would be coming into my HSA each month - about $500 - and set up automated monthly payments accordingly. Basically, I called each provider's billing department and told them what we could afford to pay each month. To my surprise, they all agreed to my suggested terms. I then set up automated monthly payments directly from the HSA. That was key: money goes into the HSA and comes out of the HSA, but it never touches my bank account. Which means that it never touches our budget. 

7. As I paid off smaller bills, I used the debt snowball method to increase payments to other providers. A few weeks ago we paid the balance of the surgeon's bill, so now we can allocate $500/month to the last remaining bill for hospital services.

As of today, that bill holds a balance of $1800. We'll pay it off by March - one year after my son's surgery.

A Member of the HSA Fan Club


My company does offer a more traditional health insurance plan, one that would have us paying higher monthly premiums but much lower deductibles. Personally, though, I'll never go back to a more traditional plan because the HSA offers so many benefits. 

Lower monthly premiums? Nice.

Free money from my employer? Yes please.

A tax deduction to the tune of nearly $7K? Mmmhmmm.

Tax-free interest? Ooooooh yeah.

An account that we can use to pay for healthcare expenses as long as there's money in it? Sign me up.

DON'T GET ME WRONG: the healthcare system in the United States is a complete shitshow (hashtag TRUEFACT), and if you don't see that, well, lucky you because clearly you've been sheltered from its horrors up to this point. I also know that I am writing this from a relatively privileged position: we have the financial wiggle room to contribute to an HSA. But if you have an HSA available to you, you might be able to use it as a tool to wrangle a little bit of control if/when you face a medical emergency.

Have you ever been hit with a big medical bill? How did you handle it? Do you have advice for others going through a similar experience?


Friday, November 16, 2018

November 2018: Budgeting For Celebration Season


Budgeting at the end of the year is always a challenge for us. During October, November, and December, we've got a lot to celebrate in our household:
  • Two birthdays
  • Our anniversary
  • Thanksgiving
  • Christmas
  • New Years Eve (this one doesn't actually count because our celebration usually consists of eating potato chips in our pajamas and falling asleep at 11:15 PM)
Although we make an effort to restrain ourselves, we often end up going a little overboard on extras during these special occasions. Last year, for example, we had every intention to lay low at Thanksgiving and enjoy a quiet long weekend at home. Instead, we found an impressive hotel deal and ended up taking a last-minute, three-day getaway to the desert

Last year's desert pool party
We had such a good time that we decided to take a similar get-out-of-town approach to Thanksgiving 2018. This time we're going on a road trip and visiting a national park a few hours away from home. It's going to be more expensive than last year's adventure because we're staying in a hotel for four nights. Breakfast is included with the room, but we'll be paying for groceries and some meals out, plus gas, plus kitty camp for our Very Expensive Feline. 

Will it be cheap? No. But do I need this mini-vacation? Yes. YESSSSSSS. I don't feel bad about spending the money to enjoy ourselves. 

(P.S. IMPORTANT PSA: You shouldn't feel bad about spending money on things you care about, either. Okay? If you need a break, if you need to get away because your brain is on the verge of cracking into a million little pieces like mine is, SPEND THE MONEY AND TAKE THE BREAK.)

As you'll see in our budget below, we're paying the bare minimum towards student loans this month. Half of our disposable income will be reserved for our getaway; the other half has already gone into savings. 

Speaking of savings, the student loan vs. savings dilemma continues. Part of me wants to go all-out on our loans and get them paid off lickety split. Another part of me is so miserable in my job that it seems wiser to put intensive debt payoff on hold and save up the cash for a one-year career break. For now, we're going the savings route, but we'll re-assess the situation in February and possibly pay off my remaining balance then. 

November 2018 Budget


Note: I may have overestimated gas and pet expenses. I'd rather overestimate than underestimate, though, and if we do have extra at the end of the month, it'll go right into savings.


Expense:
Budgeted:
Rent (including water, sewer, trash)
2100
Internet
65
Phone
78
Insurance
73
Student Loan #1
202
Student Loan #2
400
Thousand Trails
108
Gas/electric/utilities
140
Food
870
Gas
125
Cat
160
Netflix
13
Classroom stuff
40
Other
840
Savings
800
Total Expenses
6014


Sunday, November 11, 2018

Step Into My Time Machine: Highlights Of My 30s


I turned 40 last month, and in the weeks leading up to the big day, I couldn't help but reflect on the previous decade. Overall, my 30s were a wild, fun ride, and although I have clearly made some career and financial mistakes, I regret very, very little about any of it.

Want to take a trip back in time with me? 


Age 30-32:


When I turned 30, we had just purchased our own home in a bedroom community outside a big city. Although I wasn't a fan of the neighborhood - too cookie cutter - I loved everything about our cozy little house. It was the first time I'd lived in a place that felt like home. We were also the proud, exhausted parents of a two year old who refused to sleep through the night (he didn't sleep through the night until he was five).

My little dude, back when his motto was,
"Sleep is for the weak!"
This was 2008 - Great Recession time. We were lucky. Other than the fact that the value of our house plummeted right after we bought it, we didn't feel the direct effects of the economic downturn because both Fortysomething and I were working as contractors in online higher education. Many people went back to school when they lost their jobs, and universities couldn't seem to hire instructors fast enough to keep up with the pace of registration. We were able to teach as many classes as we wanted to. Financially speaking, 2008 and 2009 were actually banner years for us. We made over $100,000 in 2009 from contract work and were able to pay off $30K in credit card debt that we'd amassed in the previous decade.

The upshot was that we were earning a good income, but we were chained to our computers all. the. time. I despised it. We'd just moved to town, so we didn't know many people, and we didn't know how to meet anyone because we were so busy working within the confines of our house. I often felt trapped and miserable. I wanted to throw my computer out the window and smash my desk to smithereens with a sledgehammer. 

Age 32-35:


Frustrated with my dead-end career, I researched graduate school opportunities at local universities and applied to a program in the physical sciences. I landed a full ride complete with health insurance, tuition, and a small teaching stipend. Initially, I was nervous about being one of the older students in the department, but it turned out to be an excellent fit. Every day was full of new information and new adventures and I just soaked it all in. 

Plus, I got to travel. I presented at conferences throughout the United States, conducted fieldwork in the southwest and South America, and even traveled to the Caribbean and Italy (twice!) I missed my family while I was abroad, but I'm not ashamed to say that I relished every moment of these experiences. (Sidenote: when I ask my son now how he felt about me being away for weeks at a time when he was little, his response is usually, "Huh? Where'd you go? CAN I GO?" so it's nice to know that I don't need to hang onto any guilt in that department.)

My favorite part of graduate school was the fieldwork and the labwork, but I was also a good teacher. I had creative ideas for the classroom, and students liked me. People kept telling me that I should teach. I kept trying to explain that I don't actually enjoy human interaction that much, but I kind of got pigeonholed. My advisors pigeonholed me and I pigeonholed myself. It is my one regret from my grad school experience.

Fieldwork in the desert = heaven on Earth
Also heaven: when you have to present at a conference in Florence, Italy. DARN.
Financially, these were not great years for us. I wasn't making much money. Fortysomething - who was also the primary parent during this time and didn't question it once because gender roles aren't his thing - busted his butt with contract work to make sure that the mortgage and bills got paid. I'll admit that I was almost completely checked out of the money side of things, especially when I was traveling. The credit card debt crept back up again.

Age 35-38:


Because my graduate program was committed to helping people obtain their degrees in a timely fashion, I defended my dissertation and earned my doctorate exactly four years after I started my PhD. I don't think I've ever been more proud of myself.

My family was also relieved that grad school was done.
The academic job market is a shitshow, but I somehow managed to find a tenure-track teaching position with my very first application. In retrospect, it's probably because everyone else took one look at that particular job ad and thought, "NO WAY IN HELL." The school was located a tiny, middle-of-nowhere Midwest town populated by lots of corn and a few people. Not really my cup of tea, location-wise, but it sounded like an adventure, and I'm always up for that. So we sold our house (at almost the exact same price for which we bought it), packed up the moving truck, and headed north for a glorious new life in the academic ivory tower.

Ha.

We lived in a moldy house with a rent of $500 per month. My salary wasn't anything to write home about, but given the rock-bottom cost of living in the area and the fact that Fortysomething was still doing well with contract work, we didn't have to worry about money. We paid off some of our credit card debt and upped our student loan payments.

Exploring our new area
I quickly realized that the job itself was a dud, in no small part because my school announced budget cuts right as we were moving in. Disconcerting, to say the least. Halfway through the first semester, I almost had a nervous breakdown (for a variety of reasons - another story for another time). I forced myself to finish out the year and decided that I just needed to give the job a chance. The first year of academia is hard for everyone, I told myself. Give it another go. But the second year was also hell and involved another brush with severe mental illness, so in the spring of that year I announced to the dean that I would not be returning in the fall.

Fortysomething was still working as a contractor and I was feeling totally lost, so we did what seemed like the most logical thing at the time, which was to sell everything we owned, buy an RV, and start traveling around the country. For six months we lived as vagabonds, saw some amazing scenery and landmarks, and bonded as a family. We intended to travel indefinitely. Then we rolled into our current town and immediately fell in love. We meant to leave. We just... didn't.

This sign in Austin, TX summed up our philosophy.
Note: At some point I'll have to write a post about full-time RVing. It's actually a very affordable way to live and we truly enjoyed it. 15/10, would do again.


Age 38-40: 


New town! No job! Money got tight. I applied for a part-time hourly position at REI and landed the gig. Much to my surprise, I loved it. I loved not being confined to a desk, loved learning about hiking and climbing, loved talking about the outdoors with coworkers and customers, and loved the culture of the company. But it paid next to nothing, and this is an expensive town. So I started looking for other work.

I found a position at the local university and quickly realized that meeting with 16-20 students every day was not my idea of a good time. When will this introvert learn? I lasted about a year. 

Back to the classified ads. This time I found a position as an online course instructor. I applied, interviewed, hit it off with my boss, and thought I'd found my dream job... which explains where I am now. My boss left unexpectedly and since then I've struggled. It isn't lost on me that at 40, my job is similar to the job I had at 30, though my pay and benefits are much better. My feelings about said job are also similar. 

And so here I am!

I've actually been working on this post for the past few days and almost gave up on it twice. But then I started to relish the walk down memory lane and see it as an opportunity: an opportunity to reflect on what works for me and what doesn't. 

What I've learned from looking back and writing this post is that...
  • ...throwing myself into new situations doesn't faze me. 
  • ...my family is awesome (I already knew that).
  • ...I'm at my best when I'm having an adventure.
  • ...I need to stop trying to force myself into job situations that are clearly not working for me. 
  • ...it feels good to look back and see all the things I'm proud of.

When Taking A Pay Cut Means Overhauling Your Budget

For the past week, I've been neck deep in new job stuff: HR forms, training, meetings, and actual work. Although I hesitate to get ...