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An Arm and a Hip

James Kerr

I’M THE PROUD OWNER of a shiny new, state-of-the-art left hip.

My new hip is made of super-strong titanium and cobalt chrome with a ceramic femoral ball. The doctors tell me that with proper care—alas, no more running—it should last me a good 25 years. 

The prosthetic was implanted in early June and already this modern medical miracle is changing my life for the better. It’s less than two months since the surgery and all the old arthritic pain that I’ve lived with for so long is gone.

I have a range of motion I haven’t had for years. I can bend, I can kneel, I can walk the dog without limping or hurting, I can sit in a lotus position while meditating. Other than some stiffness when I get up from sleeping or sitting, most of the time I forget the new hip is even in there. Amazing, just amazing.

Now, all I need to do is pay for it.

Including the prosthetic, surgeon’s fees, hospital services, anesthesia, imaging and various other incidentals, the whole elective surgery cost upward of $50,000, according to the explanation of benefits statements I’ve received in the mail. It’s an astronomical amount of money, and all I can say is: thank heaven for medical insurance. 

When I made an early exit from the corporate world late last year to pursue a second act as an author, I stayed on my former employer’s insurance plan by opting for COBRA coverage. The premiums aren’t cheap. I pay about $650 a month, but it’s a good plan. Between deductibles and out-of-pocket costs, my total financial responsibility for the hip replacement is about $5,000.

It’s not easy for anyone, let alone an early retiree living on savings, to come up with $5,000 for elective surgery. Fortunately, I have other tools in my toolbox to help with these expenses—in the form of two health savings accounts (HSAs) that I carried over from old employers. 

While I was working, I purposely overfunded these HSA accounts as part of my “gaining my freedom” strategy. I knew I wanted to step out of the workforce at age 62 so I could do something different while I was still young enough.

Given that I wouldn’t be eligible for Medicare until 65, I wanted enough money socked away to pay any out-of-pocket medical expenses I might incur during the intervening three years. After all, life has a way of tossing curveballs our way, especially health issues, so I wanted to be as financially prepared as possible. 

Enter the HSAs. The benefit of an HSA, of course, is that it’s built from tax-deductible dollars. The extra money I threw into those accounts each month not only reduced my taxes but also gave me a future buffer of funds that I could spend tax-free on eligible medical expenses.

Overall, I was able to put away a total of about $15,000 across the two HSAs. I figured that would allow me to cover an average of $5,000 a year in medical expenses over the three bridge years until I could go on Medicare.

With the hip replacement, I will be spending a bit more than $5,000 in this first year of freedom. But at least I know that I’ve maxed out my deductibles and out-of-pocket expenses on my medical plan this year. Any additional medical-related needs through the rest of 2022 will be covered 100% by insurance. I plan to take advantage of that by scheduling a needed routine colonoscopy at the end of this year.

On Jan. 1, 2023, the reset button gets pushed and I will be back to square one on deductibles and out-of-pocket costs. With my 18-month COBRA benefit running out in March, I’ll also need to find a new insurance plan next year. I plan to do that during the open enrollment period this fall. With my limited consulting income this year, I hope to qualify for reduced-cost health care coverage through the health care exchange.

Either way, I have about $10,000 in remaining HSA funds to cover at least a fair chunk of my medical expenses until I can go on Medicare at the end of 2024. Nothing wreaks greater havoc on a sound retirement plan than unforeseen medical bills. For me, my HSAs are a key part of weathering the storm, and I’m grateful I have them.

Now, I’m off to do a hike.

James Kerr led global communications, public relations and social media for a number of Fortune 500 technology firms before leaving the corporate world to pursue his passion for writing and storytelling. His debut book, “The Long Walk Home: How I Lost My Job as a Corporate Remora Fish and Rediscovered My Life’s Purpose,” was published in 2022 by Blydyn Square Books. Jim blogs at PeaceableMan.com. Follow him on Twitter @JamesBKerr and check out his previous articles.

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