I am on Cal-COBRA after working for a small employer. I have an HSA- compatible policy and an HSA, but my premiums are high (because of my age) and I use up my deductible and out-of- pociet maximum every year, and also have a lot of uncovered health expenses because some of my doctors are out-of-network.
As a result, I can count on my medical expenses exceeding the 8% threshold for deductibility every year.
ISTM to me that the Health Savings Account is actually not saving me any money -- I put $3500 (pre-tax) into the HSA and then take it out again (untaxed), but that $3500 is just $3500 less in deductions once I exceed the deductibility threshold. But maybe the tax experts here have a different view?
If it makes a difference, I live (and pay taxes in) California. And I expect my combined state & federal "next dollar" tax rate to be about
20-25% for the next 3 years (until I start getting Social Security at age 66).