High-Deductible Health Plan (HDHP)
A health insurance plan with a higher deductible and lower premiums that qualifies you to open an HSA.
What is High-Deductible Health Plan (HDHP)?
A High-Deductible Health Plan (HDHP) is a health insurance plan with a higher annual deductible than traditional plans. In exchange for the higher deductible, HDHPs typically have lower monthly premiums. Most importantly, having an HDHP is the only way to qualify for opening a Health Savings Account (HSA).
For 2024, a plan qualifies as an HDHP if it has a minimum deductible of $1,600 for individual coverage or $3,200 for family coverage. Maximum out-of-pocket limits are $8,050 for individuals and $16,100 for families. These numbers are adjusted annually for inflation.
HDHPs must cover preventive care before the deductible is met. This includes annual physicals, vaccinations, and certain screenings. For other care, you'll pay the full cost until you meet your deductible, then typically pay coinsurance until you hit your out-of-pocket maximum.
Frequently Asked Questions
What makes a plan an HDHP?
For 2024, an HDHP must have a minimum deductible of $1,600 (individual) or $3,200 (family), and maximum out-of-pocket of $8,050 (individual) or $16,100 (family).
Are HDHPs good for everyone?
HDHPs work well for healthy people who don't use much healthcare and want to save on premiums while building HSA savings. They may not be ideal for people with chronic conditions or frequent medical needs.
Do HDHPs cover anything before the deductible?
Yes. Preventive care like annual checkups, vaccinations, and recommended screenings are covered before you meet your deductible.
Related Terms
Health Savings Account (HSA)
A tax-advantaged savings account for people with high-deductible health plans to pay for qualified medical expenses.
Deductible
The amount you must pay out-of-pocket for healthcare before your insurance starts covering costs.
Out-of-Pocket Maximum
The most you'll pay for covered services in a plan year, after which insurance pays 100%.
Premium
The monthly amount you pay to maintain your health insurance coverage.
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