Making the Most Out of A High Deductible Health Plan
High deductible health plans have monthly premiums that are cheaper than most other options, but that doesn’t always mean they’ll save you the most money. Read on to find out if this type of health insurance is your most cost-effective option.
What Is a High Deductible Health Plan?
A deductible is the amount of money you have to spend on healthcare before your insurance kicks in.
So, a high deductible health plan (HDHP) is any health insurance plan with a deductible greater than $1,350 for an individual or $2,700 for a family; on average, though, these plans tend to have even higher deductibles than that (around $4,300 for an individual and $8,000 for a family).
What Does a High Deductible Health Plan Cover?
As long as your plan is compliant with the Affordable Care Act (i.e. it’s not a short-term or alternative health plan), it will cover a variety of essential benefits, including hospitalizations, maternity care, mental health, and more. You will be expected to pay your deductible amount before your insurer will help cover costs, so a one-time specialist visit or lab test may cost a few hundred dollars. However, you’ll never pay more than the out-of-pocket max ($6,650 for an individual or $13,300 for a family) on in-network care.
HDHPs are also legally required to provide a series of free preventive benefits, including annual checkups, well-woman visits, vaccinations, and more.
Examining If a High Deductible Health Plan Is Right for You
Because HDHPs make you pay full price for your care until you hit your deductible, frequent trips to the doctor, pharmacy, or emergency room can add up fast. Those costs can quickly outweigh any savings you earn with less expensive monthly premiums. For example, if you have a very expensive ($5,000)procedure, a pricier gold plan would actually save you money in the long run.
That said, if you don’t use much health care and don’t want an expensive plan you’ll never use, an HDHP may be a great fit! We often recommend this plan type to people who:
Just want protection in case of an unexpected emergency
Don’t have young children (they tend to use a lot of health care!)
Aren’t managing a chronic health condition, like cancer or diabetes
Don’t visit a specialist often or need a major operation soon
Ways to Save Money With an HDHP
One savvy way to turn your HDHP into a money-saving machine is to pair it with a health savings account (HSA). This is a tax-free savings account reserved specifically for medical expenses. HSAs are an easy way to make your dollars go further when it comes to health care. If you’re shopping for an HDHP, be sure to filter your plan search results on Stride to show HSA-eligible options.
Inside tip → If you have an HDHP, shop around for your care. Urgent care facilities, for example, tend to be significantly less expensive than the ER and provide many of the same services. Also, providers will often discount their services if you pay cash up-front. Don’t forget to use the money in your HSA to pay for these occasional expenses.
Finding a High Deductible Health Plan for 2019
Still not sure if an HDHP is right for your healthcare needs? Get a free, customized plan recommendation on Stride, or talk to one of our insurance specialists. We’ll do the math for you!