What is a High-Deductible Health Plan?

With a name like “high-deductible health plan,” you might get the idea that we’re talking about some expensive health coverage. But a high-deductible plan can actually save you money.

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Your health plan’s deductible is the amount of medical expenses you have to pay before your coverage starts. Some plans have deductibles as low as $500. Others have deductibles as high as $5,000. For a plan to be considered high-deductible, the deductible needs to be at least $1,100.

Why Choose a High Deductible Plan?

There are two reasons to choose a high deductible plan — and both of them can save you money.

First, a high-deductible plan costs less in premiums. The higher your deductible is, the lower your monthly premiums are. So even though you’re responsible for more of your medical bills when you receive care, you’re saving money each month on your insurance bill.

Second, with a high-deductible plan you are eligible to open a Health Savings Account. A Health Savings Account, or HSA, lets you save money to pay for your healthcare. And you save money without having to pay taxes on it, so it’s the government is kicking in extra money to your savings account. The money in your HSA can be used for almost any medical expense — including things that health insurance doesn’t pay for, such as cold medicine. You can also these funds to pay for your plan’s deductible.

Think a high-deductible plan might be right for you? Compare all your options before you make up your mind. Use our free service to connect with agents licensed in your state. Fill out an easy online form, and you’ll be contacted with free insurance quotes.