What Is A High Deductible Health Insurance Plan And How Does It Work

You’ve probably heard of a High Deductible Health Plan (HDHP)—1/3 of our Select Health membership has chosen this type of plan. We’ll explain what this means and what you should expect from a HDHP.

Features of a HDHP:

  • Lower monthly premium
  • Higher deductible (typically at least $1,500 a year for individuals and $3,000 for families)
  • Certain HDHPs be combined with a Health Savings Account (HSA) to help pay for medical expenses
    • An HSA allows you to save money to pay for things like a doctor visit (copay) or prescriptions  


Step 1: Pay your monthly premium

The amount you pay each month for insurance coverage.

Step 2: Meet your deductible

For certain medical services and prescriptions, you pay this every year before your plan will pay for eligible charges.

Step 3: Pay a copayment

An upfront fee you pay to a doctor for medical services.

Step 4: Pay coinsurance

A percentage of charges that you pay a provider or facility after the deductible has been met (most commonly, 80/20 coverage).

Step 5: Out-of-Pocket Maximum

The maximum amount you will pay out of pocket on an annual basis (consists of your deductible, coinsurance, and copayments). If you meet the out-of-pocket maximum, eligible charges for most services are covered 100% for the rest of the year.


Reference: healthcare.gov