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> tax advantages of an HSA The minuscule tax advantage here is that 1. you're paying for your health care costs with pre-tax dollars, but you can generally sti
by ryandrake 1y ago
> tax advantages of an HSA
The minuscule tax advantage here is that 1. you're paying for your health care costs with pre-tax dollars, but you can generally still deduct these even without an HSA, so +0 advantage there, and 2. you are allowed to invest the savings, and gains are not taxed at the federal level (but may be taxed at the state level), so the advantage here is your savings account size x your effective tax rate. The premiums for a HDHP also tend to be slightly less than PPO or other plans.
For most of us that tax advantage is tiny. I would rather have an insurance plan that actually covered my costs minus a copay, even better one without a copay, even better Medicare For All where I don't even have to worry about an insurance company or pay insurance premiums. HDHP + HSA is pretty much the worst of the bunch.
- whateveracct 1y ago> for most of us yeah so for most of you, don't do it? I like that I can stuff away $7k+ I'd be stuffing away anyways tax free. And all I have to do is keep a responsible emergency fund.
- ryandrake 1y agoSo, in other words, the typical American "Hope and pray that my health costs don't outrun my savings/investment rate" philosophy. Different strokes for different folks, hope it works out for you.
- whateveracct 1y agoMy health care costs have a pretty clear soft upper bound given how HDHPs (and most plans) are structured. Deductible and out of pocket max makes it easy to be responsible and budget into an emergency fund. In terms of non-exceptional costs, I'd say I spend about as much on medical bills every year as I do keeping my cars in good shape. Less than my house and less than I spend on hobby stuff, my cats' vet, or jewelry haha.