I was riding my bike over the weekend and I decided the only thing I like about COBRA insurance is the eerily similar name it shares with a certain type of car made famous by Caroll Shelby and the Ford Motor Company.
I exited the corporate world a couple of years ago and at the time felt pretty fortunate to be able to carry forward my insurance in the form of COBRA. What I failed to do was get up off my heiney and see what my options were sooner. I was paying close to $900 per month for the privilege of insurance. For the mathematically impaired, that’s close to $11,000 per year in premium, before I ever set foot into a Doctor’s office.
Last year as the COBRA period was running out I got serious about finding an alternative. I ended up with a high deductible health plan (HDHP) that was and plan that health savings account eligible (HSA). My premium dropped to $175 ($2,100) per year, my family all received physicals at no additional charge as part of the health plan, we spent less than $2,000 on healthcare for a family of four and we fully funded our HSA.
Excluding what we paid for healthcare while under the COBRA, we saved approximately $6,700 over the previous year, we got a $5,000 tax deduction for funding the Health Savings Account, plus the money in the HSA has been growing all year. Not half bad.
This year, if possible, I will put another $5,000 into the HSA and will have enough cash on hand to cover the deductible in case of emergency.
Now my plan is not perfect and there some things I do not like about it, but on the whole, should something happen to my family, financially we will not find ourselves in a hole too big to dig out from. Isn’t that what insurance is supposed to do?
Filed under: healthcare | Tagged: hsa education, self employed health insurance, whatisanhsa
