If you have a Health Savings Account, or HSA, and aren’t using it to pay for medical epenxes, you are missing out on tax benefits.

As we explain in our Health Savings Account Guide, HSAs have a triple-tax advantage:

• Put Money in Pre-Tax – Contributions put into an HSA are not taxed. Meaning, your adjusted gross income on your taxes will decrease by the amount you deposit.

• Interest and Investment Gains are Not Taxed – Once your cash balance hits a certain threshold (i.e. $1,000, $2,000, etc.) you can shift any money above the threshold into an investment account. The investment gains are not taxed.

• Withdraw Money Tax-Free – When you withdraw money to cover a qualified medical expense you are not taxed on the withdrawal. In general a qualified medical expense is defined as an expense that pays for healthcare services, medications, or equipment. Clear-cut examples include a prescription you get at a pharmacy or a bill from a doctor visit.

At a minimum, it makes sense to deposit money into your HSA and reimburse yourself for qualified expenses so that you are paying with before-tax dollars.

So how much can you contribute to an HSA? For 2023 the IRS has set contribution limits for HSAs to $3,850 for an individual or $7,750 for a family. For those over the age of 55 there is an opportunity to contribute an additional $1,000.

Besides contributing to your HSA and reimbursing yourself for qualified medical expenses, there are a couple of other ways to optimize your HSA. You can read a more detailed explanation in our post 2 Hacks to Maximize your HSA Health Savings Account, but at a high level they are:

• Pay with a credit card, not with your HSA debit card – When you pay with your HSA debit card, you don’t receive any rewards like cash back or points. Use a rewards credit card that either provides you with travel rewards or cash back. You can view all the latest credit card sign-up offers here.

• Track your qualified medical expenses, then reimburse them years down the road from investment gains – What most people don’t realize is there is no time limit for reimbursing your expenses from your HSA. Meaning, if you incur a qualified expense in 2023, for example, you can reimburse it at any point in the future, even years down the road (you must have had an HSA when the expense was incurred for it to be eligible for reimbursement).

The benefit of tracking your medical expenses and reimbursing later on is that you can keep more cash in your HSA, which allows you to invest more money. Remember, the investment gains are not taxed, so you can keep building your investments tax-free.

Think of the alternative. If you reimburse yourself for a medical expense immediately from your HSA, that cash exits your tax-sheltered HSA account, and you miss out on all the tax-free investment gains.

HSA Medical Expense Tracking Spreadsheet

 
The best way to track your medical expenses is in a spreadsheet. That way you have a record of what expenses you’ve paid for but haven’t reimbursed from your HSA. Then at any point in the future you can reimburse yourself for some or all of the expenses in your spreadsheet.

Here’s my approach:

• Create a folder to store your receipts.
   
  Include the date and some sort of unique descriptor (e.g. 2022_12_15 Chiropractic Block of Care Robert).

• Add the expense to a tracking spreadsheet.
   
  In the first column, include the name of the receipt (e.g. 2022_12_15 Chiropractic Block of Care Robert). That way you can easily locate the receipt that aligns to the row. Remember, if you use the strategy of reimbursing yourself later on, you may need to go back years later – make it easy on yourself. Include other details in the spreadsheet such as what payment was used, the servicer/company you paid, cost, etc.

Instead of starting from scratch you can grab a copy of our free HSA medical expense tracking spreadsheet.

I included a couple examples in it to give you an idea of the type of details you may want to record. You can grab this spreadsheet for free by entering your email in the below form:

There are many ways to maximize your Health Savings Account, or HSA.

We list many of these in our Health Savings Account (HSA) Guide. This guide also provides a nice overview for those who are a newer to Health Savings Accounts.

They include things like:

• Shifting dollars from the savings portion of your HSA to the investment portion of your HSA, which allows your balance to grow tax-free (as long as you withdraw for elgibile medical expenses)

• Maxing out your HSA contributions each year

• Making sure you aren’t missing out on elibible expenses

While some of the more basic hacks to maximize your HSA are a good starting point, there are a couple of hacks that most people don’t know about.

And when I say hacks, let me be clear: these are all 100% legal ways to take full advantage of your Health Savings Account.

If you are ready to take your HSA game to the next level, here’s two things you can do:

Hack #1: Pay with a credit card, not with your HSA debit card

 
Similar to how a bank provides you a debit card that allows you to make purchases directly from your bank account, HSA providers also provide a debit card so that you can make purchases directly from your account.

The problem with an HSA debit card is that you miss out on credit card rewards, such as cash back and travel rewards.

There is no requirement to use an HSA debit card to use your HSA. You can use any form of payment, even cash, to make purchases. Then all you need to do is reimburse yourself.

It may feel like an extra step, but over time medical spend can really add up. Additionally, when you pay with a credit card it gets you in the practice of uploading a receipt when you go in and reimburse yourself. When you use an HSA debit card, it can be easy to not keep a copy of your receipt.

One other thing to think about is the fact that medical expenses can sometimes be quite material. We had our first kid in 2023 and we knew that the bill would be in the thousands, since we have a high deductible health plan.

So what we did was we signed up for a new credit card that required a certain amount of spend to receive their sign-up bonus (e.g. $2,000 within the first four months to get 50,000 points, which translated to a $500 statement credit). We easily put the required amount on the card when we paid the hospital bill.

To recap: pay with a credit card for the rewards, save the receipt, and go into your HSA servicer’s portal to reimburse yourself.

Hack #2: Track your qualified medical expenses, then reimburse them years down the road from investment gains

 
This second hack builds off of the first one.

Something that most people don’t realize with a Health Savings Account is that there is not a time limit for when you can reimburse yourself for a qualified medical expense.

Practically speaking, you could have a hospital bill of $1,500 in 2023 that you paid for with a credit card. As long as you save the receipt and keep a record of the expense, you can reimburse yourself 5, 10, 15, or even 40 years later.

One thing to keep in mind is that the eligible expense does need to occur when you have a high deductible health plan and an HSA. So if you had a bill in 2021 but didn’t have an HSA until 2023, you can’t go back and reimburse that 2021 bill.

This is a huge benefit for a few different reasons:

• You keep more cash in your HSA
   
  With an HSA you can put money in pre-tax and take money out pre-tax (as long as it’s for an eligible medical expense). While that cash is in your HSA, you can also invest it.
   
  What this means specifically for our example of a $1,500 hospital bill in 2023 is that you don’t have to take out $1,500 in 2023. You can let that $1,500 you would have taken out and let it grow via mutual fund investments in your HSA until 2023, in which case you can withdraw it. So instead of paying $1,500 with little investment gains in 2023, you can potentially take out $1,500 ten years later totally from investment gains.

• You Build up a Secondary Cash Emergency Fund
   
  If you take this approach you can, at any time, reimburse yourself for your expenses. You don’t have to wait until years down the road.
   
  Let’s say over the course of a couple years you have $2,000 of eligible medical expenses. That means any day you could log into your HSA servicer’s portal and reimburse yourself for $2,000 worth of expenses.
   
  I often talk about an HSA being a medical emergency fund, which it is, but if you are able to hold off reimbursing yourself you can build up a cash reserve that can be tapped, tax-free, at any given time in the future. The longer you hold off on reimbursing yourself, the larger this fund will be.

• Future Medical Expenses May Be Massive
   
  In general, I think the annual contribution limits for Health Savings ACcounts are relatively low.
   
  For example, in 2023 the limits are $3,850 for an individual or $7,750 for a family. To be clear, I am not saying this is a small amount of money and there is certainly an argument to be made that there is an increasing divide of those who have well-funded HSAs and those who do not. But what I am saying is that health care expenses are becoming more and more material, especially for seniors. If you let your HSA grow while you are in your 20s, 30s, and 40s, you will have more tax-free assets to use later in life for expensive medical care such as long-term care in a facility or in-home care.
   
  With this in mind, the more money you can keep within your HSA the more you can invest within your HSA and the larger your nest egg will be for future expenses.
   
  And remember: in a pinch, as long as you tracked your expenses you can always get reimbursed from your HSA. Which is why this hack works so well.

Tracking Your Medical Expenses

 
The best way to track your medical expenses is in a spreadsheet. What I do is this:

• Create a folder to store your receipts. Include the date and some sort of unique descriptor (e.g. 2022_12_15 Chiropractic Block of Care Robert).

• Add the expense to a tracking spreadsheet. In the first column, include the name of the receipt (e.g. 2022_12_15 Chiropractic Block of Care Robert). That way you can easily locate the receipt that aligns to the row. Remember, if you use the strategy of reimbursing yourself later on, you may need to go back years later – make it easy on yourself. Include other details in the spreadsheet such as what payment was used, the servicer/company you paid, cost, etc.

Instead of starting from scratch you can grab a copy of our free medical expense tracking spreadsheet. I included a couple examples in it to give you an idea of the type of details you may want to record. You can grab this spreadsheet for free by entering your email in the below form:

 
To recap:

Get yourself a solid rewards credit card instead of using the HSA servicer’s debit card.
 
Start tracking your medical expenses and saving your receipts.
 

Or, perhaps you may have had an HSA for years but haven’t used it.

It sounds weird, but I love writing and talking about Health Savings Accounts. I don’t think enough people know about the benefits of Health Savings Accounts.

An HSA comes with a number of benefits. It creates a (much-needed) medical emergency fund, has a “triple tax advantage,” and is a retirement account on steroids.

We’ll go through all the details of an HSA in this Health Savings Account guide so you have all the info you need to take full advantage of the benefits. Let’s start by talking about High Deductible Health Plans, or HDHPs. Why start there? Because you need to have an HDHP to contribute to an HSA.

High Deductible Health Plans – What Are They?

 
HDHPs are health insurance plans that have a relatively high deductible before your insurance kicks in. For example, you may need to spend $3,000 of your own money towards medical costs before your health insurance pays anything. Even though your insurance doesn’t pay anything until you hit your deductible, you would still reap the benefits of having health insurance because you would get their negotiated pricing, which knocks off some of the cost of provider visits, pharmacy drugs, and other costs.

The IRS sets the parameters for what is and isn’t an HDHP. For 2023, the IRS defines an HDHP as any plan with a deductible of at least $1,500 for an individual or $3,000 for a family. As long as your coverage hits those minimums you have an HDHP and are eligible to contribute to an HSA.

$1,500 is actually a pretty low deductible. Many plans will have a deductible of $3,000+ for an individual and $6,000+ for a family. Typically the higher the deductible the lower the monthly premium. The good news is that HDHPs total yearly out-of-pocket expenses are capped by IRS guidelines. These out-of-pocket costs can’t be more than $7,500 for an individual or $15,000 for a family, though this limit doesn’t apply to out-of-network services which could have a cap as high as $10,000+ for an individual or $20,000+ for a family.

You may be wondering how the out-of-pocket max comes into play, since insurance kicks in once you hit your deductible. Well, just because you hit your deductible doesn’t mean that you are done owing money; it just means your insurance will cover most of the costs. You may see something like an 80/20 cost share once you hit your deductible, meaning for a $1,000 bill you would owe $200 and your insurance would cover $800. The out-of-pocket max is the absolute maximum you will pay. If you need an expensive surgery, a hospital stay spanning a few days, or some other expensive event you will likely hit not only your deductible but also your out-of-pocket max.

HDHPs are becoming more popular

Many employees today have no choice but to sign up for an HDHP because it’s the only option that their employer offers. According to a data brief from the Center for Disease Control and Prevention, the percentage of adults aged 18–64 with employment-based coverage that had HDHPs increased from 14.8% in 2007 to 43.4% in 2017. Keep in mind this doesn’t include the millions who get their insurance through the exchanges, which virtually only offer HDHPs.

HDHPs are both good and bad. They are good because they allow for lower monthly premiums. They also can, in some situations, give an incentive for the consumer to shop around. For example, when I got a CT scan a few years ago I would have paid $1,000 if I went to the place my doctor referred me to. Instead I shopped around and paid $300.

The elephant in the room is the large amount of costs it puts on a consumer before their insurance kicks in. I wasn’t surprised in the least when Presidential candidate Kamala Harris in a debate about health care, painted the picture of the mother with a sick infant who was parked outside the emergency room, hoping she wouldn’t have to go in because she knew she could afford a bill of $1,000+.

HDHPs can serve as a “medical emergency fund”

That’s where a Health Savings Account comes into play. An emergency fund is great, but we’ve gotten to a point where even if you have insurance you are exposed to a potential for a big surprise medical bill. This is why the cost of health care is my biggest concern for millennials. Too many don’t have an emergency fund, let alone a separate medical emergency fund. I fully recognize that some are in a position where cash flow is tight and it’s extremely difficult to save money in an emergency fund.

Now that we have a solid background on HDHPs and why it is beneficial to sock away money in an HSA, let’s talk about the specifics of HSAs.

Health Savings Accounts – How They Work and How to Maximize Them

 
For 2023 the IRS has set contribution limits for HSAs to $3,850 for an individual or $7,750 for a family. For those over the age of 55 there is an opportunity to contribute an additional $1,000.

Most HDHPs will already have an HSA provider set up that you can leverage with your health insurance. If you don’t have one, though, a few of the major providers are Fidelity, Lively, The HSA Authority, and Optum. When picking one you will want to understand any fees they charge as well as the minimum balance required to invest (more on that in a moment).

One important distinction to keep in mind is that an HSA is not a Flexible Spending Account (FSA). FSAs have a silly “use it or lose it” policy where you lose any money that is left in the account at year-end. HSAs stay with you forever. You can switch employers, move to another state, change medical coverage, get married or divorced, or any other number of life changes and your HSA stays with you.

Now let’s get to the tax advantages that come with HSAs, specifically the “triple tax advantage”:

• Put Money in Pre-Tax – Contributions put into an HSA are not taxed. Meaning, your adjusted gross income on your taxes will decrease by the amount you deposit.

• Interest and Investment Gains are Not Taxed – Once your cash balance hits a certain threshold (i.e. $1,000, $2,000, etc.) you can shift any money above the threshold into an investment account. The investment gains are not taxed.

• Withdraw Money Tax-Free – When you withdraw money to cover a qualified medical expense you are not taxed on the withdrawal. You can consult a tax expert on exactly what is and isn’t a qualified medical expense, but in general an IRS-qualified medical expense is defined as an expense that pays for healthcare services, medications, or equipment. Clear-cut examples include a prescription you get at a pharmacy or a bill from a doctor visit.

One reason I call HSAs a “retirement fund on steroids” (no pun intended) is because after the age of 65 you can withdraw money from your HSA for non-medical expenses without incurring a 20% penalty. You will still have to pay taxes on the withdrawal, as this withdrawal would be treated similar to a withdrawal from an IRA. But you also have the option of withdrawing funds for qualified medical expenses and pay no taxes at all, regardless of your age. Meaning, an HSA acts similar to a standard IRA retirement account with the (huge) added benefit of potentially taking out the funds tax-free if you have medical expenses. With the way health care costs are going and with people living longer, there’s a very good chance you will have many qualified medical expenses when you are 65+.

A final benefit I want to point out is that you can use it for anyone in your household. What I like about this is that if you are caring for and covering the medical bills of a parent, sibling, or child, you can leverage your HSA to pay the bills tax-free. This could be invaluable if you have a sibling or child with a disability who you anticipate caring for long-term.

Health Savings Accounts – Strategies to Maximize

 
Whether or not you contribute to an HSA – and how much you contribute – depends entirely on your individual financial situation. You can talk this over with a financial advisor or money coach. With that being said, here are a few strategies to maximize HSAs:

• Deposit as much as possible, as early as possible. While I don’t have research or a robust data set, what I’ve seen is that people tend to only contribute to an HSA if they have medical issues. If someone is relatively healthy they don’t contribute. I will admit my wife and I didn’t max out our HSA until after we had a pair of surgeries and realized how important it was to have money set aside ahead of time.

• Shift your money out of cash and into investments as soon as possible. The HSA I have has a threshold of $2,000. I log in every two weeks and if my balance is above $2,000 I shift every dollar I can to investments. Now that I have some traction my ultimate goal is to get my HSA to $100k.

• Never use the debit card the HSA provider sends you. Instead, use a rewards credit card and then simply reimburse yourself through your HSA. HSA providers are making money each time you swipe their card, but they aren’t sharing the wealth with you. There is no requirement to use their debit card, so you should be using a solid rewards credit card instead.

Not taking full advantage of an HSA – or Health Savings Account – can be a costly mistake for those who are in the financial position to contribute to one.

There is a general lack of information about the advantages that HSAs offer. I often hear financial “gurus” give people advice such as “invest in an IRA” or “contribute more to your 401(k).”

While this in and of itself is not bad advice, I think it’s tragic how few are being advised to max out their HSA contributions. It’s a practical thing people can potentially drastically improve their finances over time.

Understanding what an HSA Is

 
Many people do not even know what an HSA is or how it works. Health insurance plans that have an HSA component allow individuals to contribute money pre-tax into their HSA. In 2023 the HSA contribution limit is $3,850 for an individual and $7,750 for a family.

Once you have deposited money into your HSA account you can use it tax-free for qualified medical expenses. Qualified medical expenses are listed in IRS publication 502, at a high level they include practically any doctor visit, medical bill, or prescription. Recently eligible expenses have been expanded further to include things such as a carpal tunnel glove and sudafed. Many vision and dental expenses fall under this category as well. As you can see, HSAs have huge tax advantages when used for medical costs.

Besides lowering your taxable income, depositing money into an HSA has the dual advantage of creating a medical emergency fund. As long as you are regularly contributing to your fund, you will never have to worry about whether you have the money to cover health expenses.

Why an HSA is the Absolute Best Retirement Account

 
Now that we’ve established the benefits of contributing to an HSA – that you can pay for eligible medical expenses tax free – I want to focus on why I think it’s the best retirement account out there.

First it’s important to realize that you will never lose the money in your HSA for not spending it within a certain time frame. This is an important difference between HSAs and FSAs (Flexible Spending Accounts). With an FSA there is a “use it or lose it” aspect to it, where you lose whatever you don’t spend within a calendar year.

Not the case with HSAs. Once you contribute dollars towards your HSA, they are available for you until you use them, even if you use them decades later.

With that in mind, it’s important to think of an HSA as a retirement account.

• Invest your Funds
   
  Once an HSA exceeds $2,000 (or whatever the HSA administrator allows – in some cases the threshold is as low as $0) the owner of the HSA can invest whatever is above the $2,000 floor. That means if your balance is at $5,000 you can invest $3,000 in mutual funds. I just did this recently and told a number of people about it. None of them knew you can invest your HSA funds.
   
  Even better, the gains on investments are not taxed if withdrawn and used for a qualified medical expense. This is why an HSA is often referred to as having a triple tax advantage.

• Like a traditional IRA, but Better
   
  An HSA is like a traditional IRA in almost every way. The biggest difference is that people are able to withdraw the money tax-free for qualified medical expenses.
   
  When you think about it, would you rather have money in a retirement account that does not allow you to withdraw for any reason without a tax penalty or would you rather have your money in an identical account that allows you to withdraw money tax-free for medical purposes?

• Employer Match
   
  Many employers will encourage employees to contribute to their HSA account by offering a matching contribution amount. Typically this will be in the $500 range for individuals and $1,000 for families.

• You can Still Contribute to other Retirement Accounts
   
  Another perk of an HSA is that it gives you another opportunity to take advantage of the tax benefits that other retirement accounts take advantage of. IRAs and 401(k)s have contribution limits, but in no way does HSA contributions count against those limits. Instead, an HSA is just one more way that people can save for retirement.

 
The many advantages that come with contributing to an HSA, including advantages that even traditional retirement accounts lack, it’s clear to see why an HSA is the absolute best retirement account.
 

COVID has resulted in mass-shutdowns of businesses, schools, and workplaces, led to stay-at-home orders, social distancing and mask-wearing, and ultimately took the US economy from a sprint to a crawl.

We’ve seen tens of millions of Americans file for unemployment.

The Federal Government has taken large-scale actions to prop up the economy including hundreds of billions of dollars in business aid, stimulus checks sent directly to citizens, and unemployment assistance at such a high level that many who receive it are making more than they were when they were fully employed.

The Federal Reserve has also taken action with near-zero interest rates and other actions that equate to trillions in aid.

Some states have begun re-opening their economy, but in some states that have been more aggressive in re-opening such as Florida, Arizona, and Nevada the number of cases have increased. Many people are experiencing fatigue from the past three months of isolation – and subsequently becoming lax or outright ignoring social distancing and mask-wearing – as a result.

With the economy largely propped up by massive government intervention and COVID seemingly here to stay through at least the remainder of 2020, many are wondering: what happens next?

The extra $600 a week in federal unemployment benefits expires July 31st.

But there are many who either won’t be able to go back to work or won’t be able to find a job if they want one, until a vaccine is widely available or herd immunity is achieved.

Without another round of business assistance from the Federal Government there is a good chance many businesses will have to either lay off additional employees, or if they have been able to retain their entire workforce up to this point, make an initial round of layoffs. This is especially true of companies that were hard hit by COVID, such as airlines and hotels, which may not see their previous level of business return for a number of years.

Testing has improved, which is helpful to allow certain aspects of life to return to “normal.” The English Premier League, for example, resumed play last week (albeit to empty stadiums).

But until we have a vaccine, we won’t see the economy return to what it used to be.

Unfortunately it’s impossible to predict when a vaccine will be available.

Which brings us back to government aid.

What do we know about another round of COVID stimulus from the Federal Government?

 
Needless to say, there has been a lot going on in the world.

For the past month a global pandemic became secondary in the news cycle to worldwide protests around the killing of George Floyd and larger systemic racism that exists today.

That doesn’t mean elected officials haven’t given thought to another round of stimulus.

In fact if you remember back to mid-May, the House of Representatives passed the HEROES Act, which included $3 trillion in additional COVID relief. (Kelly Phillips Erb at Forbes gave a great round-up of what is included in the bill).

This bill was a Democratic effort, though, and did not involve negotiations with Senate Republicans or the White House. Democrats framed it as their way of laying out what they think the next round of stimulus should look like, leaving the ball in the Republicans court to put together a counter-proposal.

While there are many things included in the HEROES Act, the two things people likely are most interested in were:

• Another round of stimulus checks of $1,200 per eligible adult and $1,200 per dependent (instead of the $500 per dependent in the CARES Act)

• An extension of the $600/week surplus federal unemployment benefits through January 31, 2021

Despite many Republicans admitting that another round of stimulus is needed, Republicans have attacked various aspects of the HEROES Act and certainly will not bring it to vote, let alone pass it, as is.

With that in mind, what are they open to?

One thing that many have hinted as an option, including Senate Majority Leader Mitch McConnell, is a second round of stimulus checks.

What they are seemingly not supportive of is extending the supplemental $600 a week federal unemployment benefit.

If unemployment numbers come in better than expected the next few weeks we can expect Republicans to become even less fond of the idea of extending federal unemployment benefits. Conversely, if they come in worse, they may be more open to some sort of compromise.

Republicans have also floated the idea of giving some sort of bonus to people who return to work. The rational being it gives an incentive for going back to work, while generous unemployment benefits act as a disincentive.

Assuming a compromise can be reached, we should see a another round of stimulus pass the House, Senate, and White House after the 4th of July Holiday and before the end of July.

In fact, in mid/late June President Trump said that another round of stimulus will happen and that details will be revealed in the coming weeks.

My predictions:

• A second round of stimulus checks – Likely at the $1,200 per adult and $500 per dependent level that we saw in the CARES Act

• Some compromise on unemployment benefits – Perhaps $200/week supplemental instead of $600

• A “return to work” bonus

• Student loan relief extended through the end of the year (more on that next)

• Another round of business relief, most likely forgivable business loans and direct relief to hospitals and the health care system

This is all speculation at this point, of course, and I’ll be keeping tabs on how things develop the next few weeks.

What about Student Loans?

 
Federal Direct student loans have been paused through the end of September, 2020. No interest will accrue, nor will any payments be required from borrowers. These months where payment is not required will count towards student loan forgiveness programs

Read my full overview of what is happening to your student loans during COVID for more information.

I also give some tips on what to do while your student loans are paused during COVID. Spoiler alert: do not make voluntary payments.

As far as what happens next with student loans, I think there is a good chance that the pause on Federal Direct student loan payments will be extended from the end of September to the end of December.

In the Democrats HEROES Act I mentioned earlier, there was originally some provisions for the government to provide relief for private student loan lenders, who have so far been left completely out in the cold. Those provisions did not make it in the final bill.

If you do have private student loan debt I share a couple of strategies of what to do during COVID.

If Democrats concede that it is unlikely the Republican Senate will allow private student loan relief in the next bill, they may push harder for relief of federal student loans. Good news for federal student loan borrowers, but unfortunate news for private student loan borrowers.

What Happens Next?

 
What happens next is another round of economic stimulus is passed by the Federal Government. We don’t know what it will look like, but the odds are very high some agreement will be made between the Democrats and Republicans.

Things won’t truly get back to normal until we have a vaccine, and the assumption is that we will have a vaccine before herd immunity would theoretically be achieved. That could be the end of 2020, or 2021.

I personally think gaining an understanding of how government policy impacts your money is underrated. That’s why I’ve focused so much on policy in this post.

But at some point you have to look at what you can do proactively, including actually taking advantage of that policy. For example, the government can put student loan forgiveness into law (PSLF and income-driven loan forgiveness), but it is up to each person to actually learn about it and take advantage of it.

Let’s start by talking about being unemployed during COVID. We have an entire post on COVID unemployment benefits. We also have a post that focuses on increasing cash flow when you are unemployed due to COVID.

There is nothing wrong with being unemployed during a pandemic. With that being said, your unemployment may last quite some time, depending on what your job is and how hard hit your industry was.

Refreshing your resume, tapping into your network, and looking at job postings regularly are all proactive things you can do to put yourself in the best position of landing a job. Beyond that, though, you shouldn’t put a lot of pressure on yourself to be productive. Sure, it’s great if you take up running and read a book a day. Many are struggling with the mental and emotional tole of COVID, though, and are struggling even if they have a job. Be easy on yourself.

Still employed during COVID? I outline a number of things you should do, including making sure you have a healthy emergency fund before even thinking about tackling debt.

Here are a few other posts you may be interested in:

Ways to Feel in Control During Uncertain Times

15 Ways You Can Make Money From Your Computer Right Now

List of Companies that Will Pay You to Deliver

The Jumbo Emergency Fund: The Rise of the 12-Month Emergency Fund

Let me start by establishing some credibility: I have bad allergies.

I’ve had sinus surgery and the underlying issue is partially due to my bad allergies. After my sinus surgery I went to an allergist and found out I was allergic to 92% of the most common allergens in my home state, Minnesota.

I’ve been taking allergy medicine daily for years now.

There are two types of allergy medicines. Allegra or Claritin do not contain pseudoephedrine, which is the decongestant that is typically paired with an antihistamine; AllegraD and ClaritinD do, though. Unfortunately this is also used to produce meth so you need to get over-the-counter.

AllegraD and ClaritinD 24 hour tablets typically cost over $1 per pill, and that’s after a coupon. A 10-pack can sometimes be priced as high as $18-$20. A $3-$5 coupon helps, but you are still paying over $1 per pill.

If you took one of these AllegraD or ClaritinD tablets every day you would pay roughly $365 a year. Have another allergy sufferer in your family? You may be paying $730 a year, minimum for these drugs. Drugs that do not count towards your health insurance deductible. Crazy!

What about generics? There are some antihistamine + pseudoephedrine generic drugs that are comparable to AllegraD or ClaritinD, but they aren’t available at every store. Even when they are, you are typically looking at $10 minimum for a 10-pack of 24 hour tablets. That still comes out to $1 per day.

The Money-Saving Allergy Medicine Hack

 
I have to credit a pharmacist for offering advice on a different approach that could save us money.

It’s super simple: buy the antihistamine and pseudoephedrine separately.

Generic pseudoephedrine runs about $5 for a 20 tablet, 12-hour pack. That’s $0.50 per day.

A 70-tablet pack of 24-hour Claritin at Target costs $34.99.

 
Wait a minute. That’s also about $0.50 per day. When you combine the two we are right back at $1 per day. What gives?

Well, the key is to not buy a name-brand antihistamine.

If you go to this product on Amazon you can see that a full-year’s worth of antihistamine tablets is just $16.99. For me it’s showing as $12.99, which translates to $0.04 per tablet or day.

 
So let’s compare the two. You can pay $1 per day, minimum, or you can pay ~$0.54 a day.

$365 vs. $197. A savings of $168 a year.

Remember this is the minimum. In many cases you will be paying closer to $1.50 per day per tablet if you are going with the name brand antihistamine + pseudoephedrine.

For anyone suffering allergies I recommend using this hack to save money. There’s no reason to pay more for the same product.

Student loan debt. Wage stagnation. High cost of living. High cost of childcare. Credit card debt.

The list goes on and on.

Of all the financial pressures that millennials face, nothing quite compares to health care, specifically the cost of health care and how it is currently structured from a financial standpoint. In the rest of this post I’ll explain why this is my biggest financial concern for millennials today, as well as what can be done about it.
 

Why Health Care Is My Biggest Concern for Millennials Today

 
Health care in the United States is expensive and complex. Many would argue that the care is also the best in the world…for those who can access and afford it.

There are three specific things that cause health care to be my biggest concern for millennials today. It starts with the financial risk of forgoing insurance.

Prior to the passing of the Affordable Care Act, access to health insurance was difficult. If you didn’t have insurance through your employer, and you had any pre-existing conditions, it would be difficult or impossible to find insurance that would cover a pre-existing condition. That’s no longer the case today, but there are still many who go without health insurance for one reason or another.

Forgoing health insurance is a huge financial risk. I recently read an NPR piece about a hospital that has a practice of suing patients who don’t pay their bills. Many of these patients are likely uninsured. The story of a 24 year-old who had a hospital stay due to a mental health issue was shared. What’s devastating is not only is she now strained financially, but that financial strain is likely straining her mentally, the very thing she went to the hospital for in the first place!

At any given time something could happen to someone who is uninsured that would land them in the hospital. It could be a freak accident, a heart attack, or any other number of things. Those hospital bills could easily reach $10,000+. It’s unlikely someone who is forgoing insurance can afford a hospital bill, since the reason they are forgoing insurance likely has something to do with their finances. Which leads me to my next cause for concern with health care…high deductible health plans, or HDHPs.

For those who aren’t aware, high deductible health plans are insurance plans that offer a relatively low monthly premium with the trade-off being a high deductible. A deductible is what you must pay before your insurance kicks in. HDHPs can have deductibles as high as $6,000 or more.

HDHPs have their benefits, as low-premium plans are more popular than high-premium plans. They are becoming more and more commonplace, too, and in many workplace benefit plans and ACA exchanges they are quickly becoming the only option available. Additional benefits that are often touted with these plans is the fact that consumers will be more price conscious with their consumption. They may “shop around” for a service (I did do this for a CT scan, paying $300 instead of $1,000).

But there is one huge flaw with this: the average American does not have stable enough finances for HDHPs to work effectively. According to a report by the Federal Reserve, approximately four in ten adults can’t afford a $400 emergency expense without borrowing money or selling something. Yet HDHPs can have deductibles well into the thousands.

There’s a reason there are so many fundraising pages related to medical expenses. Recently the CEO of GoFundMe told CBS News that one-third of all donations made on GoFundMe go towards health care costs.

With the financial strains on millennials, it’s difficult to argue that HDHPs are an ideal form of insurance. They do keep premiums low, but at what cost? Many (who are able to) are looking for alternatives such as Health Sharing Ministries (which I am not a fan of), because they find insurance to be so expensive and the deductibles so high that the insurance feels worthless. Upon even surface-level analysis, HDHPs becomes another example of how the health care system works, but only if you can afford it.

Another aspect of health care that concerns me isn’t a short-term risk for millennials, but something they need to get ahead of: the rising cost of health care later in life.

There have been many estimates thrown around about the projected cost of health care in retirement. The most cited number is one that was cited in a study published by Fidelity, where they projected that the average 65-year-old couple retiring this year will need about $280,000 to cover healthcare in retirement. And that’s a couple retiring today, not in thirty years.

What’s underlying the high cost of care is a good thing: better medicine and health care to keep people alive longer. End-of-life care can be expensive, and if you factor in the expensive assisted living facilities that are popping up all over the country to accommodate an expected influx of boomers, it can be expensive to be 65+. This concerns me for millennials because most have enough of a challenge with getting out of debt and surviving in the short-term. that they aren’t able to sock away large sums of money in their 20s and 30s, and possibly not even in their 40s. They may have enough to retire, but everyone wants to be able to afford the best health care in retirement. There is no guarantee millennials will be able to do so without a drastic change in the system or, on an individual basis, a large enough salary to invest a decent amount for retirement year-after-year.

The issues I bring up aren’t new ones. Senator Kamala Harris shared a story in a Presidential debate about the Mom parking outside an emergency room, praying that her child’s fever would go away so she didn’t get billed thousands of dollars she couldn’t afford.

What You Can Do to Deal with High Health Care Costs

 
There is only a limited amount we can do to prepare our finances for health care, and unfortunately it’s something that can be challenging for millennials and non-millennials alike: an emergency fund.

The only way for those who have HDHPs to protect themselves is by having enough in an emergency fund to cover their deductible. Unfortunately that deductible can be in the thousands of dollars. Regardless, emergency savings is a must.

Once someone has built a cash emergency fund, I recommend they focus on contributing money to a Health Savings Account, or HSA. HSAs have tax advantages that include:

• Grow Money Tax Free – With an HSA you are typically required to keep somewhere around $2,000 as a cash balance. Once you get past that minimum benchmark, though, you can move money into the investment portion of your HSA. Similar to a 401(k) or an IRA, there will be a variety of mutual funds you can invest in. The gains on these investments are tax free, and you can shift the money back into the cash portion of your HSA at any time.

• Take Money out Tax Free – When you withdraw funds from your HSA for qualified medical expenses (think prescriptions, doctor bills, etc.) you are not taxed on the withdrawal. If you withdraw money for non-qualified medical expenses, the amount will be taxed as regular income and incur a 20% penalty. An important point on this: No withdrawals from an HSA after age 65 are penalized, though withdrawals for non-qualified medical expenses are taxed as regular income, meaning withdrawals are treated similar to a standard IRA.

This helps both with the short-term issues that HDHPs pose as well as the expected high cost of health care later in life. I realize many, especially those in their 20s and 30s, do not have money to put into an HSA. In this case I recommend working through this personal finance checklist to identify what changes can be made to improve your cash flow (and in turn, your overall financial situation).

The other thing people can do is educate and advocate. Health care is complex, which is a true statement, but oftentimes that is used as a way to minimize the opinions of people advocating for a more sensible and realistic health care system. The best way to advocate is first gaining some knowledge on our health care system and how it works. The next is to advocate your views and opinions of what should change. Even simply reaching out to your Senator or Representative can have an impact.

Ultimately everyone needs to recognize what a risk health care costs are to their overall finances and take steps to protect themselves. Beyond that, education and advocacy are important steps to impact health care on a broader scale.