3 Simple Swaps to Harness the Full Power of Your HSA

by Laura Cave , Editor at Large at Paytient

Building up a savings balance in a Health Savings Account (HSA) can both lower your taxes and put you in a great position to access and afford care on your own terms. 

But opening the account and setting up automatic deposits is just the beginning. Here are a few simple swaps you can make to get the most out of your HSA. 

Before we dive in, please note these are important decisions that impact your finances and taxes, so while we are sharing general educational information here, it’s best to talk to your benefits leader, a financial advisor, or a tax professional before making any decisions. 

Okay, here we go!

First, swap your HSA card for an HPA or debit card.

When you’ve been saving in an HSA account and healthcare expenses come along, it can be tempting to swipe your HSA card to cover the out-of-pocket cost. However, most people who do that never have more than a few hundred dollars in their HSA. When a big expense comes in the future, your savings balance may not cover it.

Instead, if you’re in relatively good health and you’re working, consider leaving your HSA savings alone so it can grow for a while. In the meantime, pay medical bills with a debt card or spread them over a few weeks or months by paying with a Health Payment Account (HPA) card if that’s available to you. 

You’ll be surprised how quickly your HSA savings balance starts to grow when you don’t spend out of the account for a while.

Next, think of your HSA like a brokerage account, not a savings account.

With inflation on the rise in recent years, we’re all more aware of the way that dollars become less valuable over time. In order to keep up with inflation, your HSA balance needs to grow.

Consider investing your HSA balance through your HSA provider. The bigger your balance, the more it could earn, compounding the dollars available for you to spend on future healthcare costs. 

But be aware that investments can carry risks, so it’s important to take a long term view and talk to a financial advisor about what’s best for your situation— especially if you think you’ll need your funds in the near future.

Lastly, swap traditional care for virtual services to save $$$.

Your dollars will go a lot further if you can get the care you need for less. Could certain doctor visits or prescriptions be managed virtually? Is there a direct primary care provider in your area that offers low cost visits and lower cash prices on labs and drugs? Could an online pharmacy like GoodRx or Mark Cuban’s Cost Plus Drugs get you a lower price for your medications? 

With new click-for-care offerings like Function Health, Parsley Health, Ro, Hims & Hers, and Lilly Direct just to name a few, you could get care for lower prices, making your HSA dollars go a lot further. The only catch is this spending won’t count towards your health insurance deductible. If you think you’re not likely to hit your deductible this year, it may not matter, but for those who need more care, it might make more sense to seek care via your health insurance.

For more thoughts on when it might make sense to cash pay, see our deep dive.

Key Takeaways

When it comes to maximizing your HSA, it all comes down to protecting your savings, helping it grow, and reducing your healthcare costs whenever possible. 

An HPA that turns any near term healthcare costs into affordable payment plans is a great way to protect your HSA balance while it’s growing. And new virtual healthcare providers and online pharmacies are getting more popular as more and more paytients come into the market demanding better value and convenience for their care. 

See you next week, and until then, happy saving!

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