High-Deductible Health Plans

What You Need to Know

Purchasing health insurance on your own or choosing the right plan from your employer can be complicated. Regardless of whether you are young or a “senior,” married or single, have a family of five exuberant kids or three relaxed cats, selecting the right health insurance plan for your needs can be difficult and risky. High-deductible health plans have become very popular lately because consumers are frequently overwhelmed by the ever-increasing cost of monthly premiums. However, choosing a low-cost plan based on premiums alone is a gamble that could set you up for unexpected expenses. It’s important to research what you’re buying.

Here are five things to know about high-deductible health plans:

  • While high-deductible plans have lower premiums, most don’t offer protection against high out-of-pocket healthcare costs. In fact, a recent study published in the American Journal of Managed Care, showed that the likelihood of financial trouble was higher for all enrollees on high-deductible plans, but especially those who were low income or had a chronic condition.
  • Recent studies have shown that people who choose high-deductible plans are more likely to skimp on preventive care, defer needed hospitalizations, and forego taking prescription medicines.
  • Not all high-deductible health plans qualify you for a Health Savings Account (HSA). Your plan must meet the following requirements to qualify:
    * A minimum deductible of $1,350 for an individual or $2,700 for a family in 2019.
    * An out-of-pocket spending limit of no more than $6,750 for an individual and no more than $13,500 for a family in 2018.
    * The plan must be your only health insurance plan
    * You must not be eligible for Medicare
    * You cannot be claimed as a dependent on someone else’s tax return
  • According to the Kaiser Family Foundation, the average annual employer contribution to an HSA-qualified plan is $603 for single coverage and $1073 for family coverage. However, about four in 10 employers with high-deductible plans don’t contribute any money to HSAs.
  • High-deductible health plans are considered “catastrophic” coverage and generally work well for young, healthy people who don’t use a lot of healthcare services. Reuters Health reports that studies have shown individuals with chronic conditions who choose high-deductible plans are more likely to resort to expensive, crisis care through the emergency department.


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