High deductible health plan


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High Deductible Health Plan

A form of health insurance in which the policyholder is responsible for all medical expenses up to a relatively high point. For example, a high deductible health plan may require the insured to pay all bills up to $5,000. The trade-off for these plans is a lower premium. High deductible health plans are popular among young people, healthy people and those who only want to have health insurance for emergencies.

High deductible health plan (HDHP).

A high deductible health plan (HDHP) requires substantially higher than average out-of-pocket expenses before the insurance company will start paying for your medical expenses.

However, the premiums for an HDHP are generally lower than the premiums for traditional fee-for-service, participating provider organization (PPO), or a health maintenance organization (HMO) plan.

The HDHP may also pay a larger percentage of your expenses once you have satisfied the deductible. If you have an HDHP, you may be eligible for a health savings account (HSA), which allows you to make tax-free withdrawals to pay for medical care that's not covered by your plan.

Money you put in an HSA or that an employer contributes to your account and that you don't spend for qualified expenses can be rolled over and used in later years.

References in periodicals archive ?
Given the importance of health care and insurance as a campaign issue, Celent notes that high deductible health plans and HSAs could be affected by the myriad of state and federal proposals being floated.
Major health problems and the accompanying losses are still covered by the High Deductible Health Plan.
Anyone under 65 who purchases a High Deductible Health Plan can open a Health Savings Account.
For example, according to Revenue Ruling 2004-38, combining a prescription drug card with a High Deductible Health Plan will disqualify the policyholder from participating in a Health Savings Account.
Because funds paid into a Health Savings Account are immediately vested, an employee can continue to use the resources if s/he changes employment or is no longer covered by a High Deductible Health Plan.
Once a High Deductible Health Plan is in place, a Health Savings Account can be established at any financial institution--a bank, for example.

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