What is a high deductible health plan (HDHP)?

Dr. Michael Roizen, MD
Internal Medicine

This health plan requires a soprano  hiiiiiiigh deductible (typically around $1,000 to 2,500 or more) but has baritone bass looooow monthly premiums. These plans also typically have high ceilings, as high as $3 million in some cases, which means the insurer will continue to pay major medical bills up to this amount.

The HDHP is designed to work with an HSA (health savings account). The HSA is a special savings account meant to be used for costs related to your medical care and comes with a few tax benefits. First, any money you put into the HSA (up to $6,150 for a family getting coverage) is tax-deductible. As it’s sitting in your HSA, it can earn you interest that you do not pay tax on (tax-free interest). Finally, as long as you use the money on medical expenses, you won’t have to pay taxes on your HSA savings. Not to mention, they travel with you if you move to another state, don’t spend it by the end of the year, or if you change jobs.

Bottom line, look at your budget and the cost for coverage with an HDHP and see how they match up compared to other plans.

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Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.