Ok I think I have everything going except
://i.gyazo/100dca27206fb43bec97145a208b2245.png
Do I delete the first half of that and just connect the animation to the end state?
Yep, just delete the health part and connect just the anim with the final anim pose 
-> because the transitions control which animation the anim bp will play
://i.gyazo/e89029b9678d1ec9c1e84afbee545fa1.png
So you are saying it’s better to delete that cast node and just connect interact action 2 set node to healthanimbp node?
Sorry here is a better overall picture of the EventGraph
://i.gyazo/396d31c088554e0c72b16dcf0c9701ad.png
Lets do it step by step 
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create the variable in the character bp and setup the damage system
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Create a Health variable in the anim bp (red) and add it as a set node. Now get a cast to your character node (blue), drag out the blue link and search for your health variable from the char bp (orange)
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In the anim graph add a new state and in the transitions you will have to add the health variable from the anim bp (like on the picture)
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add the animation into the state
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now it should work
My only issue now is that I made two variables of health, one in MyCharacter blueprint and the other in the Actual Character blueprint I created… One is health and the other is healthanimbp… Can I just make them both Health?
You can call both of them health, but you need one in the char and another one in the anim bp -> form the char bp you set the value of the var in the anim bp. You have to do it like that, because you are not able to use variables which are outside from the anim bp in the anim graph (just follow the steps that I posted above)