High Deductible Health Plans

With health insurance costs rising all the time, more and more people are on the lookout for ways to save money on health-related expenses.  The good news is that there are more and more ways to save money on health insurance appearing, with one of them being the High Deductible Health Plan, abbreviated as the HDHP.  Being covered by this type of plan allows you to save money on premiums as well as having higher deductibles, which we will go into later.  In addition, being covered by an HDHP allows you to get various types of medical-oriented savings accounts, a major type being the health savings account.  These health savings accounts (HSAs) allow you to make tax-free payments, saving quite a bit on medical expenses.

So, what is a deductible?  The deductible is the amount of money you must pay your health insurance company at first, before they pay medical costs for your future expenses.  But why is having a higher deductible better?  Having a higher deductible usually means the cost of your insurance is lower, allowing you to save money overall.

Comparing a high deductible health plan to a traditional health insurance policy, HDHPs are the clear money-saver.  While traditional health insurance plans cost less for prescription medicines, HDHPs end up with more savings since you pay for your own medical costs until you pay your deductibles.

HDHPs also offer even more benefits – some HDHP providers provide some “wellness benefits” that are given even before you pay your deductible.  Savings from HDHPs can also go towards your health savings account, resulting in even more tax savings.  However, it is important to note that, for some people with certain medical histories or plans, HDHPs may not be the best choice if one visits doctors often or require large amounts of treatment and medication.

{ 1 comment… add one }

  • Ollie and Jax January 21, 2012, 3:44 am

    Wonderful web site. A lot of useful info here. I’m sending it to a few friends ans also sharing in delicious. And naturally, thanks for your effort!

    Reply

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