I've mentioned this a few times before on other threads, but since I am about to do it myself again for this year, I thought I'd share. Also, please add any potential tips I am missing.
Due to my son's health issues, we pay our entire year's health insurance deductible at once. This year it only took 36 hours to max out our entire year's deductible, the year before that - 5 days. Some of this depends on when his appointments are booked, but basically it is always less than 1 month. The strategy below works if you max out in 3 months or less or can come up with other spending to reach the cc spend needed.
1) If possible, get an HSA. Even if you can't afford to sock money away in one and use it as a long term savings vehicle, If you are eligible for one and it makes sense in terms of your premium (figure this out - it is important), set one up. They will most likely send you a debit card for this account to use for expenses. Do not use it. If an HSA does not make sense for you, a FSA (flexible spending account) may work with this strategy if your expenses are pretty much a sure thing. YMMV, do the math for your own situation.
2) Amass medical expenses. Bills will then start coming in.
3) Open credit card with a large sign up bonus. These typically have a minimum spend in the first 3 months - often $3-5,000. I am not familiar with the cards that give travel rewards as we are not able to take trips now, but good ones for cash bonuses include Chase Sapphire, and the Capital One Savor card. A good description of these and many other cards can be found at doctorofcredit.com I was just approved for the Cap. One savor card and will use this as an example going forward. Because the clock to spend the minimum on the card usually starts the day it is opened, I would wait until the first bills start arriving to sign up for the card. We spent our deductible Jan. 2nd, but didn't get the bill until this week.
4) Charge the medical bills to the Savor card. Bam - I just met the minimum spend and did it with 1 bill.
5) Save receipts/bills and then reimburse yourself from the HSA. There is no time limit on how long you hold the receipts. If you can't afford to let money sit in an HSA, deposit some money and then reimburse yourself back shortly there after. You will still save money because you will be reimbursing yourself with the tax free money. We are holding on to all receipts as long as possible.
So for a $5,000 deductible the savings are:
$500 cash back bonus for meeting the minimum spend on the card (or sign up bonus of your card)
$50 - 1% cash back on purchases on the card (or whatever you card is giving out)
What you didn't pay in taxes on the tax free $$ of the HSA.
Interest the money in the HSA made while you waited to reimburse yourself (there is no time limit, you can literally reimburse yourself decades from now unless the law changes.)
Also, dental expenses and orthodontics are acceptable expenses for an HSA. We did a similar deal this past fall to pay for one of my kids' braces, except that one also included a 10% discount if you paid up front and didn't do their "free" financing. Between card sign up bonuses, the discount, cash back and HSA, we estimate we saved at least $1,000 off my son's braces.
