if you're medical expenses are that low, you are a PERFECT candidate for a high-deductible health savings account (HSA) it increases your tax-advantaged space [equivalent to 401k] by 3.1k individual/6.25k family. Those with high expenses --where the larger deductible starts to become an issue---are the ones that should be wary. Many employers will offer incentives/directly contribute to your HSA. I believe mine is typical and they hand me $1300/yr for my HSA and I payroll deduct the other $1800. Medical expense receipts I keep in a folder for eventual claims against this fund. For now--tax advantaged savings.
If a 401 plan is good, so is an HSA.
No real reason to prefer paper Ibonds over electronic: I'm just kinda annoyed by the treasury security features and I like paper I guess. Something to put in the safe, take images of, store redundantly 'in the cloud', along with the proof of purchase receipts.
Return of Ibonds is expected to not be impressive with one caveat--if inflation picks up you're good. If not, no biggee. Inflation insurance really. Personally I like to use Ibonds as the stable source of my emergency fund--tough to beat in that application. [VS HY checking, MM, CDs, App-o-Rama schemes, savings accounts]. I'm a huge fan of de-risking a portfolio where it makes sense. Ibonds are perfect for that.