My Husband Switched Jobs and Our Deductible Skyrocketed. Here's Why That Didn't Bother Me

For many years, I was spoiled when it came to health insurance. That's because my husband's employer provided us with a plan that didn't impose an annual deductible for in-network services. That saved us a lot of money, especially since we have kids and tend to visit the doctor frequently.

Last year, however, my husband switched jobs, and that meant getting onto a new health insurance plan. It also meant going from a $0 deductible to a $3,000 deductible. 

Thankfully, we factor medical bills into our monthly budget, so we already had some funds allocated for healthcare costs. And also, we have money in our savings account we can tap in case our paychecks can't cover a larger medical bill.

But still, going from no deductible to a $3,000 deductible was a big change, to say the least. And while it wasn't the most welcome one at first, at this point, I'm actually not bothered by it. Here's why.

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When you get access to a really useful account

Switching over to our new high-deductible health insurance plan meant being able to fund a health savings account, or HSA, for the first time in our lives. And HSAs offer a host of tax benefits.

For one thing, HSA contributions are tax-free, so they exempt a portion of your income from taxes. This year, the family-level limit for HSA contributions is $7,750. By putting that money into our HSA, we make it so the IRS can't tax us on that amount of earnings. 

Also, unlike flexible spending accounts, HSA balances don't have to be spent down year after year. In fact, it's a good idea to reserve some of your HSA funds and invest them for future healthcare needs. Another benefit of HSAs is that investment gains in your account are tax-free, as are withdrawals used to cover qualified medical expenses. 

Does your health insurance plan render you eligible for an HSA?

There are certain requirements your health insurance plan needs to meet in order to be compatible with an HSA. First, you'll need a minimum deductible that changes from year to year. 

This year, an individual deductible of $1,500 is required, or a family-level deductible of $3,000. These limits are rising to $1,600 and $3,200, respectively, in 2024.

Your plan also has to meet maximum out of pocket requirements. This year, that max can't exceed $7,500 for individual coverage or $15,000 for family-level coverage. Next year, these limits increase to $8,050 and $16,100, respectively.

Going from a health insurance plan with no in-network deductible to a $3,000 deductible wasn't an easy thing. But getting access to an HSA not only softened the blow, but made me realize that our current health plan may actually be a better deal. While our deductible is high, the premiums we pay for our plan are fairly reasonable. And between that and being able to fund an HSA and enjoy a world of tax savings, it's really not such a bad setup.