Creative financing

As I'm waiting for the final medical bills to start arriving, I'm doing a bit of creative financing to help lessen the blow at least a little bit.  First off is the HSA account I started this year. To get it started I am contributing $50 a month and my employer contributes a (max) $50 a month/$600 year. But, I can contribute more, if I want to. My maximum contribution limit for 2021 is $4600, as being over 55 years old I get to add another $1000 "catch up" if I chose. 

This got me to thinking. I had noticed, in clicking around my new HSA account online, that in addition to my payroll deduction and employer contributions, I can also make a direct contribution, from my bank account. I just would not realize the tax break benefits of any contribution I make on my own, until I file and report it on my tax return. With my contributions and the employer $50 a month, but the end of this year I will have $700 balance (it didn't start until June of this year). This leaves me with being able to add a max of $3900 directly, myself, if I want to.

This would be a smart thing to do, I think, since I'm going to have thousands of dollars to pay out for dh's medical bills. I might as well contribute the remaining limit of $3900 to that account and then pay towards his medical bills out of it. That way, when I file my tax return next spring, I will be able to report the contribution of the $3900 and get the tax break for it.

I double checked and yes, I can use my HSA account for my spouse's expenses. And yes, I can claim the contribution that didn't go through payroll on my tax return.

I can also pay these doctor and hospital bills on my credit card that earns 2% cash back. Of course that is only smart if I am going to pay off the whole balance charged when the first credit card statement comes for it. I don't have $22,500 in the bank right now. I certainly don't want to pay interest that a credit card would charge on these hospital bills. I also realized I can double dip on the HSA tax break, by first charging the medical expense to my 2% cash back card and then requesting the reimbursement for the medical through the HSA to come direct back to me, rather than paying it direct to the medical provider out of the HSA account. The $4600 (HSA account balance) paid via the cash back card, first, is a $92 cash back refund I wouldn't get if I just paid the $4600 out of the HSA direct to the provider. 

Ok, so back to the fact that I don't have $22,500 in savings right now. By the time these bills come due (I'm expecting in the next 30 days or so) I will have $11,000. I don't want to pay interest for several months on the remaining $11,500. Ok, well just yesterday I got in the mail a credit card offer for 2% cash back (same as the one I already use regularly) and also a special $200 bonus if $1000 is charged within the first 3 months, AND no interest for 15 months. I also got a similar email for a Capital One credit card. This would probably be the best option to use. While I don't know how what the credit limit on the card is (I haven't applied for it), I'm guessing it would be fairly high limit, based on my income and around 800 credit score. I don't plan to spend 15 months paying it off, but with zero interest at least I have that option, should other unexpected expenses arise.

Now, of course I could easily borrow this from my mom. But, as I'm very conservative with her finances, this is my last resort. She has more than enough in her regular checking and savings to cover that. Let alone, her dang investment account earns that amount in like a month, LOL. But, again, I'd rather cover this myself, but if I have to, in order to avoid a high credit card interest rate, I would do that.

Here's my calculations of what I'm actually going to chip off that $22,500 out of pocket expense by being a little creative:

Income tax savings: $760

2% cash back: $450

Extra cash back reward: $200

That's a total of $1100 reduction in the $22,500 cost.  

I've also heard people say (but this was several years ago) that they have gotten big doctor bills and called the hospital or doctor and offered to settle and pay it all off and would they give a discount for doing so. Many say yes. I used to work in the billing dept for 2 different doctors years ago and we did this for people all the time. They'd have a big balance and call up and say if I pay this all off right now, rather than make payments, can you give me a discount and we always did. It's worth a shot. I just don't know that I feel comfortable doing that is this dang small town! Everybody knows everybody's business, right down to something like that. Same reason I have no desire to ask them to set up a payment plan for me on the balance. I'm sure they do that all the time and it would be no big deal to do that, but again, that would be my last resort.