High Deductible Health Plans (HDHP)

The idea of getting a High Deductible Health Plan may, at first, seem like a risky one. After all, your deductible plays a huge role in how much money you are going to spend each year on health insurance costs.

However, there are certain scenarios where this kind of health insurance policy is actually a smart choice, which can allow for more patients to get insured. With the rising costs of healthcare, staying insured has become increasingly difficult. Purchasing an HDHP has many advantages and disadvantages, just like PPOs, HMOs and all of the other types of health insurance plans. It is only through doing your research and considering your personal finances that you can make the correct decision with regard to your own and your family’s healthcare.

However, once you have chosen a plan that works for you, it is also important to learn how and when to go about purchasing it. This article will inform you about this specific type of health insurance policy in detail, and help you to determine whether or not it will be the best choice for your healthcare needs.

What is an HDHP health insurance policy?

Of all coverage options, a High Deductible health insurance policy is one of the fastest growing policy types. Due to the constant rise in healthcare premiums over the past few decades, many have found their health costs to be out of their budget. In an effort to provide employees with some kind of health coverage, employers have had to look at options that allow them to pay as little as possible every month.

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With High Deductible insurance, the main benefit is that you can get the health coverage that you need at one of the lowest available monthly premiums. This can allow you to pay relatively little on maintaining a healthcare policy. However, as the name suggests, these policies often have a very high deductible. This is the financial figure that you will need to exceed in paying every quarter that you have medical costs, before your insurance will kick in to cover the rest of your expenses. Paying your deductible is often entirely out-of-pocket, which can often make it seem like you are spending a lot of money before your insurance starts working.

There are benefits to HDHP coverage, however. Besides simply having lower monthly premiums than typical HMO or PPO plans, some of these benefits include:

  • Being able to save money if you do not regularly utilize healthcare services.
  • Knowing what you will be expected to pay out-of-pocket every quarter, as opposed to relying on the changing healthcare economy.
  • Usually being able to utilize whatever healthcare services you want, regardless of whether or not they are in your network.
  • Being able to open a health savings account alongside this policy, which allows you to pay for certain out-of-pocket health costs without being taxed on the money in that account.

Who is eligible for High Deductible insurance?

HDHPs are available to anyone who is otherwise eligible to purchase a health insurance policy, as it is one of many different types of insurance on the health insurance marketplace. This allows for both individuals and businesses to purchase healthcare plans as long as they are citizens or otherwise legal residents of the country and they are not receiving Medicare coverage.

However, just because you are eligible to get an HDHP does not mean it is the best plan for you. While the positives of the program are listed above, there are also downsides to such a policy, including:

  • High out-of-pocket costs, especially for family plans.
  • Difficulty if you have a chronic illness or condition that needs to be constantly treated, because your deductible will reset every quarter.
  • Expensive surgery costs if you have not yet reached your deductible.

It is important to consider whether or not this type of plan makes sense for your economic and health situation before committing to the lower premiums that it promises.

HDHP Costs and Coverages

Without a doubt, High Deductible health insurance plans are some of the most varied types of health insurance in terms of cost. In 2018, the U.S. Internal Revenue Service (IRS) labeled a “high quarterly deductible” as at least $1,350 for an individual healthcare policy, and at least $2,700 for a family plan. These are genuinely high numbers, which are expected to go up as the years go by and as the healthcare marketplace becomes more volatile. There are also copayments and coinsurance required in these plans, which may be high if you have not reached your deductible or if you are going to an out-of-network provider. However, it is also important to remember that your monthly premiums will often be quite low under these plans.

Getting an HDHP does give you a good amount of coverage for the price. Unlike HMOs, you can use this service to access any healthcare provider, regardless of their preferred network. Although you may need to pay extra for out-of-network visits, the ability to do so gives you much more flexibility if you travel often or need to visit a number of different specialists to treat a problem. These insurance plans are also popular for their coverage of preventative care services under the Affordable Care Act, such as blood pressure and diabetes screening, cancer tests and children’s behavioral assessments.

How to Get High Deductible Health Insurance Plans

Buying your own HDHP health insurance is easy to do, but it will require a good deal of research on your part. First, these insurance policies can only be purchased during the “open enrollment” period every year, which occurs at the end of the calendar year, or during one of the qualifying life events that can trigger a change in your health coverage. These timeframes were created in order to keep Americans up-to-date on their healthcare leading into every new year, and allows for certain big events such as pregnancies and weddings to allow for new policies to be purchased.

During the proper time, you may visit the online healthcare marketplace in order to check the quotes on insurance premiums from healthcare providers all over America. The right HDHP coverage provider will be one that factors in your family size and household income, gives you a good monthly premium and deductible and has a network with a good list of healthcare providers. Once you have chosen and signed up for the policy that fits your needs, paying your monthly premiums and filing insurance claims when they are needed will allow you to protect your health and finances.

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