What is a High Deductible Health Plan (HDHP)?

Health insurance plans come in many shapes and sizes. Some are tailored for people who want a lower monthly payment, and some might be better suited for people who have regular health care needs.

One of the most common plans available from commercial health insurance providers is a High Deductible Health Plan.

WHAT IS A HIGH DEDUCTIBLE HEALTH PLAN (HDHP)?

A High Deductible Health Plan (HDHP) is a type of health insurance plan that has higher deductibles and lower premiums compared to traditional health insurance plans. The deductible is the amount you must pay to doctors and facilities before your plan begins to pay for eligible charges.

WHAT QUALIFIES AS AN HDHP?

For 2025, the IRS defines an HDHP as a plan with a minimum deductible of $1,650 for individuals and $3,300 for families. The maximum out-of-pocket expenses are $8,300 for individuals and $16,600 for families.

WHAT MAKES AN HDHP DIFFERENT FROM OTHER INSURANCE PLANS?

As the name suggests, HDHPs come with higher deductibles. This means you will pay more out-of-pocket before your insurance starts to cover expenses. Because the deductible is higher, the monthly premium is usually lower than other plans.

Other health insurance plans may have higher monthly premiums with lower deductibles. Some of these plans may cover the costs of office visits (after a copay) before you have met a deductible.

One of the significant advantages of HDHPs is that they may qualify you to open a Health Savings Account (HSA). Contributions to an HSA are tax-deductible and the funds can grow tax-free. Withdrawals for qualified medical expenses are also tax-free. These funds don’t expire — if you don’t use the money in one calendar year, you can use it the next year if you need to.

Because HDHPs don’t start covering medical costs until after the deductible is met, HSA contributions can help cover office visit costs and other medical expenses.

Learn more about HSAs here.

WHAT DO YOU PAY FOR AND WHAT DOES YOUR INSURANCE COVER WITH AN HDHP?

With an HDHP, you can expect to pay for most care and services out- of- pocket until you reach your deductible.

There are some exceptions to this. Many plans will cover some or all preventive care, such as vaccines, an annual exam, and certain screenings.

Once you reach your deductible, you can expect to pay your coinsurance for any care or services you receive. For example, if you reach your deductible after breaking your arm, you would pay the first $1,650 (or your deductible amount) and then 20% (or your coinsurance) after that. Your insurance would cover the other 80% for covered services.

Each plan has different deductible amounts and different coinsurance rates, so be sure to speak with your insurer or review your plan coverage materials before receiving any planned care to learn what you can expect to pay.

WHO MIGHT BENEFIT FROM AN HDHP?

While it completely depends on each individual, those who don’t anticipate lots of office visits or high health care costs might benefit from a HDHP. With a lower monthly premium, you’ll be paying less for your policy until care is needed.

BROWSE HIGH DEDUCTIBLE HEALTH PLAN OPTIONS

High deductible health plans offer lower premiums and the potential for tax advantages through HSAs.

Select Health’s high deductible health plans include a network of high-quality doctors and providers. Browse our plans to find one that fits your needs.