I’ve talked about the importance of insurance in previous posts but this week I received an upfront and personal lesson that I wanted to share today. A few months back I checked myself into my local emergency room as I began feeling excruciating pain in my lower back. I mean it was so bad I literally could not stand motionless in place for more than thirty seconds without feeling a blinding pain.
Up to this point my wife and I are debt free. We have 6 months worth of expenses in an emergency fund. Through my employer I am on a high deductible medical plan with low monthly premiums. Now back to my personal case study.
Needless to say with a high deductible plan, outside of regular check-ups, I only go to the hospital if I am in seriously dire pain. That day I was. Following a few blood tests, an examination with a doctor and a body scan I was able to rule out any damage to organs and the presence of kidney stones. In fact to this day I still am not 100% positive what caused my pain which has since subsided. The physician that treated me gave me a low dosage of pain killers and sought for me to follow up with my primary physician for further evaluation.
Fast forward to yesterday. I finally received a bill in the mail from my magical emergency room adventure. The total bill for services was over $4,000. Through my medical insurance the amount I owed was knocked down to just under $700. To pay for this I will be moving the amount due from our emergency fund to our H.S.A. (health savings account) to pay the bill. I love the H.S.A. because come tax time the amount of money deposited into the account throughout the year is tax deductible. So that’s nearly $700 in income that I get to keep from reporting to Uncle Sam.
The pain and mystery of my medical event was stressful enough to deal with. But having a strong foundation in our finances kept this from becoming a disaster and it lowered my tax bill for the year. And yes we will refill our emergency fund to its full amount through current month income. Five years ago if this had happened to me I would be in complete and total panic mode. Today it was essentially a stress test that proved my practices in personal finance are working like a charm!