A high deductible health plan (HDHP) is a health insurance plan with a deductible—or the amount you must pay out of pocket before your insurance coverage kicks in—of more than $1,400 for an individual or $2,800 for a family in 2021. A HDHP typically gives you lower monthly premiums in exchange for higher deductibles—meaning you'll be responsible for more of your own medical costs.
The exact details of a HDHP—including the exact deductible amount—will vary depending on the plan and provider. To know what qualifies as a high deductible health plan and how much you'll pay each month in premiums, it's important to compare different plans that are available in your area.
Here's a summary of some of the key benefits and downsides of high deductible health plans:
• Generally lower monthly premiums compared to plans with lower deductibles
• Allows you to contribute pre-tax money to an HSA (health savings account) through your employer
• Protection against high medical costs due to serious illness or injury
• Out-of-pocket costs are higher since you have to pay your full deductible before your coverage kicks in
• Not ideal for those who need frequent doctor visits, prescriptions, or other medical treatments
• You may be limited to a smaller network of doctors, hospitals, and other medical providers than with a plan with lower deductibles
Remember, when choosing a health plan, you'll want to consider more than just the deductible amount. You should also think about coverage and provider networks, as well as any other provisions that are important to your healthcare needs and budget.