What health insurance you choose comes down to a few factors: Your overall health, financial stability, and what is/what isn’t offered by your employer. Something you might want to consider is a high-deductible health plan (HDHP). Here’s a quick look at HDHPs.
The Basics of a High-Deductible Health Plan
With an HDHP, you typically pay lower premiums than a low deductible plan. An HDHP also requires you to pay more out of pocket before your health insurance kicks in.
The benefits of a high deductible health plan are:
Low Monthly Premiums. HDHP premiums typically cost less per month than low-deductible health plans.
Health Savings Account. When you have an HDHP, you also qualify for a Health Savings Account (HSA). HSAs are great because contributions and withdrawals are tax-free when used for qualified medical expenses. You can also invest HSA funds for additional tax-free growth.
Employer HSA Contributions. According to one report, more than 50 percent of employers offer contributions to employees’ HSAs.
The downsides of a high deductible health plan are:
Expensive. The upfront costs can be costly.
High Payments. With a high-deductible health plan, your out-of-pocket costs may be higher. If something unexpected happens you must be financially prepared to cover the high deductible.
Avoiding Care. Those high payments for medical care might keep you away from checkups and other preventative measures.
Do One Thing: Consider your overall health and financial ability to handle a large deductible before signing on for an HDHP.