Are you tired of paying exorbitant monthly premiums for health insurance that you hardly use? If so, you’re not alone. Luckily, there are high-deductible health plans (HDHPs). These plans are gaining popularity among individuals and families who want to save money on their healthcare expenses.
In this article, we’ll explain what you need to know about HDHPs, including how they work, their pros and cons, how to choose the right plan for you, and how to make the most of your coverage. Whether you’re considering switching to an HDHP or just curious about this type of health insurance, read on to learn more.
Before diving into high-deductible health plans (HDHPs), let’s review the definition of a deductible. A deductible is the amount of money that an individual needs to pay out-of-pocket before their insurance company starts covering their healthcare expenses. The higher the deductible, the more an individual needs to pay before their insurance kicks in.
Meanwhile, an HDHP is a type of health insurance plan that has a higher deductible than traditional policies. Individuals are responsible for paying all medical expenses until they reach their deductible. According to the IRS, the minimum deductible for an HDHP is $1,400 for an individual and $2,800 for a family. The demand of HDHP enrollment is growing, with studies indicating that as of of 2021 (the most recent data available), 55.7% of American private-sector workers were enrolled in HDHPs.
These plans fully cover routine preventive care without copays or coinsurance before the deductible kicks in for the following list (which is not exhaustive):
- Blood pressure screening
- Depression screening
- Diet and nutritional counseling
- HIV screening
- Immunizations for diseases, such as chickenpox, the flu, and the measles
One of the benefits of HDHPs is that they usually come with a lower monthly premium than traditional health insurance plans. This lower monthly cost can be attractive for individuals and families who want to save money on their healthcare expenses.
To help offset the cost of high out-of-pocket expenses, some HDHPs come with a health savings account (HSA). An HSA is a tax-advantaged savings account that can be used to pay for qualified medical expenses. Individuals and employers can contribute to the HSA, and the funds can be rolled over from year to year. However, not all HDHPs come with an HSA, so you will need to check the details of the plan you’re considering.
HDHPs can be a good option for individuals and families who are generally healthy and don’t expect to need many medical services throughout the year. However, for those with chronic health conditions or high healthcare needs, an HDHP may not be the best choice. Consider your healthcare usage, needs, and budget before selecting an HDHP.
Choosing an HDHP
While the choices for an HDHP abound, they are not all the same. Here are some important considerations to help you narrow down the alternatives:
- Healthcare Needs: Determine if you or someone in your family has chronic health conditions, such as heart disease, cancer, diabetes, stroke, or arthritis, and/or if you expect to need significant medical services throughout the year.
- Cost of the Deductible: Calculate how much you’ll need to pay out-of-pocket before your insurance kicks in and make sure you can afford that amount. You can request and compare health insurance quotes online to see how much different insurers are offering.
- Network of Healthcare Providers: Ensure that your preferred doctors and hospitals are in-network to avoid higher out-of-pocket costs.
- Health Savings Account (HSA): Check if the HDHP comes with an HSA, as this can help offset the cost of high out-of-pocket expenses.
- Premium Tax Credits: Determine if you’re eligible for premium tax credits, which can help reduce your monthly premium costs.
- Prescription Drug Coverage: Look at the prescription drug coverage offered by the HDHP to ensure that your medications are covered.
- Telemedicine Options: Consider if the HDHP offers telemedicine options, which can provide convenient and cost-effective access to medical care.
- Plan Flexibility: Consider the flexibility of the HDHP, such as whether you can switch to a different plan or add family members during open enrollment.
Making the Most of an HDHP
Once you’ve selected an HDHP, there are several strategies you can use to maximize your coverage and manage your healthcare costs.
One of the most important ways to save money on an HDHP is to use preventive services. Many preventive services, such as annual check-ups, flu shots, and cancer screenings, are covered by HDHPs at no cost to the policyholder. By taking advantage of these services, you can catch potential health problems early and avoid costly medical bills later on. These can help in improving heart health, mental health, and other health conditions. In turn, there’s a lesser chance that you’ll be needing expensive medical services.
Another way to save money on an HDHP is to be an informed consumer of healthcare services. Before getting medical care, research the cost of the service and compare prices among different providers. Many providers offer cost estimates online or over the phone, so take advantage of this information to find the best deal.
If you’re facing a high medical bill that you can’t afford, don’t be afraid to negotiate with the provider. Many providers are willing to work out payment plans or offer discounts for patients who are struggling to pay their bills.
Further, consider enrolling in wellness programs offered by your HDHP. These programs can help you maintain good health and reduce your healthcare costs over time.
The cons of high-deductible health plans
We have established that HDHPs keep your monthly payments low. But they can also put you at risk of facing large medical bills that you may not be able to afford.
Since HDHPs generally only cover preventive care, an accident or emergency could result in very high out-of-pocket costs. For example, if you are diagnosed with a medical condition that requires expensive treatment, you’ll be on the hook for the cost of that care.
Another possible downside is how HDHPs may impact your future health. You may not go to your medical visits to treat an infection or injury or experience dangerous symptoms because of high out-of-pocket costs. Multiple studies confirm that individuals use less health care when faced with health plans requiring higher cost sharing, such as HDHPs.
Let’s say you have a chronic health condition, such as diabetes or heart disease, that requires ongoing medical care and regular prescription medication. In this case, a high deductible health plan may not be the best choice because you’ll likely end up paying a lot out-of-pocket before your insurance kicks in. For example, if you have a $5,000 deductible and your medication costs $500 per month, you’ll have to pay the full cost of your medication for the first 10 months of the year before your insurance begins to cover any of the cost.
Unfortunately, you can’t tell if or when a medical disaster may strike. So that’s what makes picking a health plan a bit of a gamble. If you need emergency care, you’ll have to pay that deductible up front and any costs beyond that up to the out-of-pocket max. So looking at the out-of-pocket max — and seeing if you have access to that amount — can also be a good idea when trying to choose a health insurance plan.
Also, an HDHP is generally not the right fit for families with young children because they are more likely to visit a pediatrician for colds and viruses.
As you age, you’re statistically more likely to have higher medical expenses. Before opting for an HDHP, you should consider how your health could change in the next year. But no matter your age, if you’re in good health and have no reason to anticipate expensive healthcare costs, an HDHP might be the right fit for you.
Visit Holistic Healing Heart Center in Los Angeles
The Holistic Healing Heart Center is Dr. Cynthia’s one-stop shop for all your health care needs. Whether it is progressive heart disease treatment, alternative high cholesterol treatment, primary care services, or integrative lifestyle programs to maintain health and offset the aging process, our tea team can provide a variety of services. Dr. Cynthia Thaik, M.D., one of the top doctors in Los Angeles, is a Harvard-trained, holistic cardiologist who practices with her heart. She helps replace stress, fear, and anxiety in patients by instilling a sense of inner calm and peace. She educates and inspires clients to take proactive steps toward health and healing. Her team has helped thousands of people transform their lives through the ways they think, feel, and act. Please visit our website for a list of accepted insurance plans.