How Do We Define the High-Deductible Health Plan or HDHP?

Did you know that you could possibly receive high-quality medical care at a price reasonable enough not to break your bank? If you are seriously looking for this for some time now, then the odds are high that you’ve heard something about high-deductible health plans before. To many of us, we know this as the HDHPs. 

HDHPs, or high-deductible health plans, come with a much higher deductible as opposed to  traditional insurance policy, so they are a bit more expensive. Additionally, you can combine or partner them up with Health Savings Accounts (HSAs). By doing so, you can optimize the value of your health savings account.

What is a High-Deductible Health Plan, and How Does It Work?

Standard health insurance requires that individuals meet their yearly deductible before their plan will begin to reimburse them for their medical expenses. Similarly, this is true with a High-Deductible Health Plan (HDHP). What makes it distinct, though, is that the yearly deductible is significantly higher. Standard health insurance plans have greater deductibles but lower premiums than high-deductible health plans (HDHPs).

According to the IRS, the high-deductible 2020 plan as any plan that includes a deductible between $1,400 and $2,800 for an individual and a family. For individuals, the total annual out-of-pocket costs should not exceed $6,900 for an HDHP. A family plan would cost around $13,800. 

All copayments, deductibles, or coinsurance are included in those figures. Once you’ve reached this threshold, your HDHP will pay for all of your in-network medical costs. This cap does not apply to services used outside of the network, though. You will be accountable for them even if your deductible has been met.

Use the form below to discover what health insurance options are available to you in your area and how much they cost. You may be eligible for government subsidies that reduce the cost of insurance based on your income. The majority of individuals spend less than $50 per month on a plan.

What is the Relationship Between HDHPs and Health Savings Accounts (HSAs)?

Because high-deductible health plans (HDHPs) can result in significant out-of-pocket expenses for healthcare, many people choose to set up a health savings account  which most of us are familiar with as HSA. 

An HSA can accept pre-tax payments, regardless of annual contribution limits. This assists in minimizing healthcare expenditures associated with having an HDHP. If there are some unused funds in your HSA, those will also roll over to the following year if they remain untouched or not consumed during a given calendar year.

Do not confuse health savings accounts (HSAs) with flexible spending accounts or FSAs if a member of your household suffers a medical catastrophe that calls for a high degree of care. This is due to the fact that, despite the modest insurance premiums, you will suffer considerable out-of-pocket expenses. Furthermore, your yearly limitations will not cover any out-of-network care.

It is critical to note that, until your yearly deductible is met, an HDHP will pay 100% of the cost of any treatment, excluding preventative care. This includes paying for any operations, in-patient or out-patient procedures, or therapies you may require. Even if you have health insurance through an HDHP, you might wind up with considerable medical debt in the worst-case situation.

However, if an HDHP is all that their company provides, some people may have no other alternative for coverage.

Is the Coverage Provided by HDHPs Comprehensive?

Because of the Affordable Care Act, you won’t have to pay anything for preventative care services in the future.

All plans required to comply with the ACA, including those sold via the Marketplace, must also cover these ten essential health benefits. When it comes to preventative care, you’ll have to meet your yearly deductible before your HDHP plan will begin to pay for it.

  • Ambulatory patient care (outpatient care, no need for admission to a hospital)
  • Emergency services
  • Inpatient care (like overnight stays and post-surgery care)
  • Maternity, pregnancy, and newborn care (both before and after birth)
  • Services for mental health and drug abuse disorders, including behavioral health management (may include psychotherapy and counselling)
  • Prescription medicines
  • Services and equipment for rehabilitation and rehabilitation
  • Services for laboratories
  • Services for prevention and wellness, as well as chronic illness management,
  • Pediatric services, including oral and eye care 

Other Alternative Options You Have

Plan from the Marketplace/Obamacare. Choose an Obamacare or Affordable Care Act plan and enroll in a marketplace health insurance plan through the marketplace. Plans and pricing may be found here.

Medicaid. With respect to your monthly expected income, you may potentially be qualified for Medicaid coverage. You may check your eligibility and apply here.

COBRA. There’s a program called COBRA for those who’ve just lost their jobs. With this insurance program, they are required to pay the full cost of the same insurance that was provided to them by their former employer. COBRA insurance is more costly as compared to Marketplace insurance. It is more advantageous, though, in the sense that it lets you keep the coverage you already had.

Medicare. When you reach the age of 65, you become eligible for Medicare. To enroll, give us a call at 816-608-7888

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