Should You Choose a High-Deductible Health Plan?

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What is a high-deductible health plan?
- Any health plan carrying a deductible of at least $1,650 for an individual or $3,300 for a family.
- Total out-of-pocket expenses for the year can’t exceed $8,300 for an individual or $16,600 for a family, including deductibles, copayments and coinsurance.
- Annual physicals.
- Immunizations.
- Routine prenatal care and well-child visits.
- Screening services for things like cancer, heart disease, pediatric conditions, and vision and hearing disorders.
- Tobacco cessation programs.
- Obesity weight-loss programs.
High-deductible health plans and HSAs
Pros and cons of a high-deductible health plan
Pros:
- Typically lower premiums: These types of plans usually cost less per month than more traditional health plans with a lower deductible.
- Ability to use an HSA: Having a qualified HDHP means you’re eligible to put thousands of pretax dollars into an HSA, which you can use for medical expenses this year or in the future. Your HSA money can also be invested and grow over time.
- Employer contribution: More than half of employers offering HDHPs make contributions toward their workers’ HSAs, according to data from health policy nonprofit KFF. That’s essentially free money toward your health care costs.
Cons:
- High costs for initial care: If you manage a chronic illness or you seek frequent health care beyond preventive visits, you may find yourself spending more out of pocket, although an employer contribution can help with upfront bills.
- High deductible if disaster strikes: Health insurance is meant to protect you in the case of a serious illness, but you must be prepared to pay out of pocket for your full deductible (and any costs beyond that point, up to the out-of-pocket max) if something unexpected happens.
Is a high-deductible health plan right for you?
A high-deductible health plan might be right for you if:
- You’re healthy and rarely seek medical care for illness or injury.
- You can afford to pay your deductible upfront or within 30 days of receiving a bill for that amount if a surprise medical expense comes up.
- You have the means to make significant contributions to an HSA.
- You're healthy and are interested in using an HSA as a way to save or invest money.
- Your employer HSA contribution is enough to cover much or most of your deductible.
A low- or no-deductible health plan might be right for you if:
- You're pregnant, planning to become pregnant or have small children.
- You see a doctor frequently for a chronic condition.
- You take multiple prescription drugs or one drug that’s very expensive.
- You or your children play sports, especially those with high risk of injury.
- You can’t afford the high deductible.
Doing the math on HDHPs
- Premium: This is the amount of money you’ll pay each month for the plan.
- Deductible: This is the amount you’ll pay before your health insurance starts to cover care, with the exception of qualifying preventive care in some cases. Make sure you note if there’s a deductible per person and an overall deductible for the family.
- Copays and coinsurance: These are payments you make for medical services after you’ve hit your deductible. Copays are a set amount of money you pay for a particular service, such as $20 each time you see a specialist. Coinsurance is a percentage of the approved service cost, such as 20% of the cost of an office visit.
- Out-of-pocket maximum: This is the most you could spend on covered health care in a year. There may be a per-person max and an overall family max.
- Employer contribution: If you’re comparing a high-deductible health plan to another plan, make sure you include any contribution your employer makes toward your HSA, which you can use to pay for medical care.