Webster Bank EVP, HSA Bank President Chad Wilkins: The big health insurance mistake young people make

Let’s face it … health insurance can be expensive. When you’re working to stretch your dollar as a young, healthy adult, you may let health insurance be the first thing to go.

Yes, we’ve all heard, “accidents happen” or “it’s too risky to go without insurance.” But what many people seem to forget (or may not know) is the future financial impact of NOT having health insurance at a young age.

According to a study by the American Public Health Association, 66.5% of all bankruptcies are tied to medical issues — either because of high costs for health care or time out of work. If you’re living paycheck to paycheck, those unexpected accidents and issues are detrimental to your future self.

So even if you are young and healthy, you can say goodbye to early retirement, or even retirement in general, if you do not prepare for the worst. 

So even if you are young and healthy, you can say goodbye to early retirement, or even retirement in general, if you do not prepare for the worst.

The good news is that there are viable health insurance options out there, especially for the young and healthy. For example, if you don’t go to the doctor as often, and can cover unexpected illnesses, then a high-deductible health plan (HDHP) may be a great fit.

The premiums with an HDHP are generally lower versus those of traditional PPO plans, plus you and your employer can contribute to a Health Savings Account (HSA) to build your savings tax free. With an HDHP you essentially “pay as you go” and have more money to use for your retirement and medical needs.

So let’s talk about retirement for a minute. While hard to imagine now, in 20 years the millennial generation will be facing retirement. In 2050, imagine you have $100,000 in your savings, 401(k), money markets, and checking accounts. With this amount of money, retirement may seem like a breeze.

But unfortunately, recent reports show that you need to almost triple that amount to cover health-care costs alone in retirement. Mind you, this doesn’t take into account the rising health-care costs year over year.

Let’s also consider taxes. Even though you may have $100,000 in savings, that doesn’t mean you get to keep all of it. You will likely have to pay Uncle Sam on withdrawals from your 401(k), savings, or traditional IRA.

Simple math

With an HSA, your money builds interest tax free. Plus, you can contribute to and distribute from your HSA tax free, leaving more in your pocket for medical expenses now and in retirement.

If you choose an HSA-eligible plan such as an HDHP, you should make the most of it, maintaining enough funds in your HSA cash account to cover out-of-pocket expenses and your deductible. This ensures your money is working for you, and unexpected medical bills will not disrupt your retirement plans.

It may all sound confusing, but it’s actually pretty simple once you do the math. While retirement may feel far off, the decisions you make today will have an impact on your future. One unexpected medical expense when you are uninsured can be detrimental to your savings and have long-term repercussions on your financial future.


Even if you’re young and healthy, it’s crucial to take advantage of the health insurance plan options available to you in order to best protect yourself now and in retirement.

Chad Wilkins serves as an Executive Vice President of Webster Bank and President of HSA Bank where he is responsible for leading the organization and its people toward sustainable growth well into the future. Chad joined HSA Bank in 2014, bringing with him more than 25 years of experience in the banking and health insurance industries. Chad has a consistent history of achievement in sales leadership, relationship management, product management, P&L leadership, and employee engagement throughout his roles as President of The Wilkins Group, his own consulting practice specializing in healthcare and financial services, Chief Executive Officer of Optum Health Financial Services, and Senior Vice President, Commercial Large Markets at US Bank.