high-deductible health plan

What is a high-deductible health plan?

A plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but you pay more healthcare costs yourself (the deductible) before the insurance company starts to pay its share. A high deductible plan (HDHP) can be combined with a health savings account (HSA), allowing you to pay for certain mdical expenses with money free from federal taxes.

For 2020, the IRS defines a high deductible health plan as any plan with a deductible of at least $1,400 for an individual or $2,800 for a family. An HDHP’s total yearly out-of-pocket expenses (including deductibles, copayments, and coinsurance) can’t be more than $6,900 for an individual or $13,800 for a family.[footnotes]High Deductible Health Plan (HDHP). HealthCare.gov. Retrieved 8 January 2020, from https://www.healthcare.gov/glossary/high-deductible-health-plan/[/footnotes] (This limit doesn’t apply to out-of-network services.)