When you understand the importance of being healthy and fit, you would appreciate having health insurance. Even those that only get sick once in a while should have a medical policy for protection.
There are various medical insurances available that will suit your needs. It is best to get one while you can.
Tip: it is best to get health insurance when you are young and strong because insurers tend to offer discounts.
Click the link below for an overview of the high-deductible health plan:
About High-Deductible Health Plan (HDHP)
A high-deductible health plan (HDHP) has two definitions you should know under the IRS: for 2020 and 2021. If you plan to include a health savings account (HSA), you should know the IRS-defined threshold.
In general, HDHP is also known as the traditional insurance plan combined with an HSA. It has lower monthly premiums than typical health insurance. And it also has a higher deductible than other policies.
Medical care, aside from particular preventive services, is paid out-of-pocket until the deductible is reached. Having an HDHP protects you in a significant health emergency.
Coverage
One factor that makes HDHP a good health plan is the full medical care given even before you meet your deductibles. Here is what will be covered in your policy:
For adults:
- Abdominal aortic aneurysm examination (men who have smoked)
- Aspirin – for heart disease prevention (men and women of certain ages)
- Cholesterol screening (certain ages or at higher risk)
- Colorectal cancer test (over 50 years old)
- Diabetes (type 2) analysis (adults with high blood pressure)
- Certain immunizations (e.g., a flu shot)
For women:
- Anemia screening (the routine basis for pregnant women or soon-to-be mothers)
- Extensive breastfeeding support
- Breast cancer mammography examination every 1 to 2 years (women over 40 years old)
- Cervical cancer test (sexually active)
- Osteoporosis inspection (over 60 years old depending on risk factors)
- Well-woman visits (women under 65 years old)
For children:
- Autism probe (18 and 24 months)
- Behavioral assessments
- Blood pressure screening
- Developmental test (children under 3 years old)
- Hearing analysis (all newborns)
- Vaccines (e.g., whooping cough, influenza, and chickenpox)
Costs
If you are going for HDHP, you need to understand that you will be paying more for health care services. The table below shows the cost of single and family coverage. That includes deductibles, copays, and coinsurance.
| Single Coverage | Family Coverage | |
| Minimum deductible | $ 1 400 | $ 2 800 |
| Maximum out-of-pocket costs | $ 7 000 | $ 14 000 |
Premiums
High-deductible health plans are the same as other medical insurances out there. Premium is the cost of your coverage you pay monthly from your savings.
If you select a medical policy with a lower deductible, you will likely pay for a higher premium. In general, the lower your insurance premium, the higher your deductible.
However, the cost of your HDHP is determined by the following factors:
- Your age
- Location
- Number of dependents
- Smoking
Tax Benefits
You can enjoy some tax benefits if your HDHP has a health or a tax-advantaged savings account. Only a few individuals use this perk, but if you get an HDHP, integrate an HSA with it.
Below are what you will be gaining from an HSA:
- You will not pay federal taxes
- The total annual contribution is tax-deductible
- Money deposited ears interest (tax-free)
- What you did not spend will roll over into the following year
The money you handed out to your HSA for payment of qualified medical expenses can be used for the following:
- Coinsurance
- Copays
- Over-the-counter medicine
- Eyeglasses
- Contact lenses
Who Should Get a High-Deductible Health Plan?
Here are certain factors you should look at if you are considering an HDHP. Insurance companies ensure that the plans they provide are suited to your needs.
If you have the qualities below, you should think about having a high-deductible plan.
1. A Healthy Person
If you are physically fit, not drug dependent, and do not go to the doctors often, you should get this plan. Insurance agencies will offer to lower your premiums in exchange for meeting the deductible.
2. You Are Sick
HDHP is one of the best options out there for people that have serious health conditions. If you are part of this group and need comprehensive medical care, you should choose this plan.
3. Able to Pay Your Deductible Upfront
This plan is right for you if you can pay your deductible right away. Also, if you can pay within 30 days after receiving a bill from an unexpected medical emergency.
4. Health Savings Account
If you have the means to contribute to an HSA every month, then an HDHP plan will work best for you.
5. To Save or Invest
You should consider an HDHP if you are in good health and want to use HSA to save money or invest in it.
An Overview of Health Savings Account (HSA)
One major reason why an HDHP is a great deal to a person is because of the health savings account. Those who have serious medical costs and know that they will meet their out-of-pocket maximum will have it easy.
HDHP allows you to deposit money into an HSA, which you can take out to pay your upcoming hospital bills. Listed down are some requirements for an HSA:
- You should have a high-deductible health plan.
- No other medical coverage (exemption: several types of ancillary coverage).
- Enrolled in Medicare.
How High-Deductible Health Plans Work? (H2)
Employers offer this type of health plan with an HSA or health reimbursement arrangement (HRA). An HDHP option gives you the same benefits a health insurance policy provides.
It also pays for your medical care. But, HDHP provides 100% coverage for preventive care even if you did not meet the deductible yet.
As for prescription drugs, you will only pay the copay amount. Some free in-network covered by HDHP for you and your dependents:
- Annual check-ups
- Vaccines (children and adult)
- Screening (certain types of cancer)
- Counseling
- Wellness visit for women
When you finally hit your deductible, your insurer will start covering all medical services. And you will only pay coinsurance. But, if you want to include your family, you also need to meet the deductible for it.
You will be protected financially from large medical bills. Your policy will shoulder everything until the end of the plan year once your hospital expenses hit the out-of-pocket maximum.
If you have an existing HSA, then use it to pay for health care or save in the future.
Pros & Cons of a High-Deductible Health Plan
Just like any other health care insurance, the HDHP has strengths and weaknesses. Take a look at the points to understand what you will be gaining from an HDHP.
Pros
Here are the following advantages of having a high-deductible health plan:
- An HDHP is one of the most inexpensive health insurance if you rarely get sick and often visit a doctor.
- If you do not have any existing medical condition, then there are no bills that you have to pay with an HDHP.
- Since the deductibles are high, monthly premiums are lower than policies with low deductibles and out-of-pocket maximum.
- With HSA, you can save money on taxes.
- It is the least expensive medical plan.
Cons
Below is a list of the disadvantages of getting a high-deductible health plan:
- There is a risk of incurring costly medical bills you might not afford.
- An accident or emergency could result in high out-of-pocket payments.
- It may impact your future health because you will avoid going to a doctor for treatments.
- You are paying the high deductible while also paying your monthly premiums.
- There is a need to meet your deductible before getting 100% medical care.
It is still wise to consult an insurance provider for your specific concerns and some important details.
Final Thoughts
High-deductible health plans do offer inexpensive medical policies. That is why many buy it combined with a health savings account. Having an HSA can help you cover some of your medical costs, plus it can save you money.
But, what is impressive with this type of plan is its free preventive care. You can visit a clinic, have immunizations and screenings even without meeting your deductible.
This type of plan is cost-effective, but you have to be sure that you can pay your premiums. Also, you should take advantage of an HSA for those tax-free benefits.
You must take your time in deciding a health care plan for you or your family. Here are some advice on high-deductible health plans:
- Shop around, and compare health plans.
- Stay with in-network providers because it will cost you less.
- Check your medical bills to know what coverage you might need.
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