We all run across all sorts of medical costs during our lifetime, some more than others. This leaves the challenge of how to pay for these medical expenses, especially if they result in a significant amount of money. Most taxpayers pay out of pocket or settle through their insurance plans.
However, thanks to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, there is also another option: a Health Savings Account (HSA). Even though an HSA is a great tool to pay health-related expenses, there are instances when it’s better to pay out of pocket.
When should you use an HSA for medical expenses and when should you pay out of pocket to allow your HSA to grow?