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Dear Dave,
I just realized that our insurance has a Health Savings Account (HSA) option.
We soon considered withdrawing this insurance and moving towards a cheaper Christian health care sharing program.
We have about $ 19,000 of debt between credit cards and a car payment, and we are at the second stage of your plan.
Our idea was to fund the HSA for a while in order to save money, cancel this policy, then move on to a shared medical care program that we estimate costs 600 $ less per month.
After that, we would start repaying our debts again. What do you think?
– Amy
Dear Amy,
An HSA has two components: the insurance component and the savings component.
You do not have to participate in the savings component. The insurance component simply consists of 100% deductible, 100% coverage after the deductible and cheaper health insurance plan.
If I were at stage 2 of baby, I would not do the savings component. I would only do the insurance component or the shared medical care program.
I'm not sure why you would need to jump if you want to definitely switch to a medical sharing program.
I have the idea of saving money, but what you are talking about is not something I recommend to people in debt.
I would not fund a multi-thousand dollar savings account just for medical reasons, even if you're not even on Baby Step 3, which saves an emergency fund of three to six months of expenses.
This money must first be used to pay the debt.
This is not the end of the world if you do not fund the HSA portion of your current insurance plan.
If you are participating in a medical cost-sharing program and you have just put in place a large emergency fund, the only thing you would really lose is the tax deduction associated with an HSA.
Good question!
– Dave
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