A high-deductible health plan (HDHP) is a type of health insurance that can offer lower monthly premiums. You may want to understand how HDHPs work, the pros and cons of the plan depending on your situation, and how a health savings account (HSA) can be funded with pre-tax dollars to pay for medical expenses.
The amount of your yearly deductible depends on the plan you choose. The higher the deductible, the more out-of-pocket costs you pay before your insurer begins covering medical expenses.
The IRS defines high-deductible health plans for 2023 as:
The plan’s out-of-pocket maximum must be no higher than $7,500 for an individual plan and $15,000 for a family plan.
Lower premiums. Pay less for health coverage monthly.
Tax-free spending account option. Eligible HDHPs help you save on medical expenses when paired with an HSA.
Higher deductible. You pay more toward your deductible before your healthcare plan begins paying for covered costs.
More out-of-pocket expenses. You may pay more out of pocket for non-preventive healthcare until you reach your plan’s yearly deductible amount.
You mainly need health insurance for preventive care
If you expect to need health insurance mostly for preventive care, like annual checkups with your doctor, then you could benefit from lower monthly premiums offered with an HDHP.
You have a health savings account (HSA)
With some HDHPs, you can use an HSA to help pay for eligible medical expenses. The money deposited into an HSA is tax-free, which can help you save money. A high-deductible health plan paired with an HSA is also known as a consumer-driven health plan.
A consumer-driven health plan (CDHP) is a high-deductible health insurance plan that allows individuals and families to set aside pre-tax money to help pay for qualified medical expenses. CDHPs are HDHPs paired with HSAs. Members may use the pre-tax funds from their HSA to pay for medical expenses, like copays and other costs, not covered by their health insurance plan.
What is the difference between an HDHP and a CDHP?
You can sign up for an HDHP for you and your family without using an HSA. A CDHP incorporates the added benefit of an HSA to help with medical expenses.
HDHPs (High-Deductible Health Plans) are available as PPO or HMO plans. Here are a few key details of each type.
PPO (Preferred Provider Organization) plans may offer:
HMO (Health Maintenance Organization) plans may offer:
Count on our experience and support to enroll in health coverage. We can help you choose a health insurance plan with Anthem and guide you through the process.
