High-deductible health plans

High-deductible health plans (HDHP)

A high-deductible health plan (HDHP) is a health plan with a larger annual deductible. With a high-deductible health plan, you will end up paying more towards your annual deductible than with other health plans, but you will have a lower monthly premium.

A high-deductible health plan qualifies you for a tax-advantaged health savings account (HSA).

What is a deductible?

A deductible is the amount you pay before the health plan begins paying for health care services. Once you have paid your deductible, your cost is typically just the copay and coinsurance; your health care provider pays the rest.

The deductible is different than a premium, which is what you pay monthly for the plan itself and is the cost you pay to keep your health coverage.

Learn about other health plan terms you should know.

Should I choose a high-deductible health plan?

A high-deductible health plan can be a good option for people who are young and tend to be healthy. This plan is best for people who don't expect to need a lot of medical services but want reassurance in the case of a medical emergency. This plan is also good for those willing to have a larger deductible in exchange for a lower monthly premium.

Benefits of a high-deductible health plan

Here are some of the most common benefits of an HDHP:

Lower monthly premiums
You will pay lower premiums each month. This will save you money if you use your plan for preventive care rather than more expensive medical treatment or procedures.
Simple benefit structure
An HDHP has a straightforward benefit structure that makes it easier to understand the maximum amounts you'll need to pay in a year.

Pair with a health savings account
You qualify for an HSA, which can be used to pay for certain medical expenses that your plan may not pay for. The money that goes into your HSA is untaxed and can be used for medical-related expenses. Some health plan providers, like Priority Health, offer a free HSA banking partner.

Federal Tax Benefits
HSA accounts allow you to take advantage of federal tax benefits and any unused funds in your HSA can roll over to the following year.

Considerations of a high-deductible health plan

Before enrolling in an HDHP, keep these points in mind:

Higher deductible cost: An HDHP comes with a higher annual deductible, meaning you'll need to pay more out-of-pocket before your health plan starts covering most medical expenses.
Higher out-of-pocket costs: While HDHPs often have lower premiums, you may face higher out-of-pocket costs in case of unexpected medical emergencies until your deductible is met.

High-deductible health plan prescription drug coverage

Under an HDHP, certain prescription drugs considered "preventive" may be covered. However, prescription drugs that do not fall under the preventive category will need to be paid in full if your deductible hasn't been met.

All MyPriority^® plans offer chronic conditions coverage for the cost of a copayment or coinsurance before deductible, including HDHPs. This coverage gives members access to a variety of medical services, supplies and medications they need to help them live a happy life, while managing their chronic conditions.

Pairing an HDHP with an HSA

Health savings accounts are flexible, tax-free savings accounts that can be invested in low-cost mutual funds to increase potential earnings and can even be a powerful part of a retirement strategy. An HSA allows employers and employees, as well as family and friends, to make contributions.

You can pair a qualified high-deductible health plan with a health savings account to save on premiums and take advantage of all HSAs have to offer. Priority Health has partnered with HealthEquity to offer no-cost HSA accounts to members enrolled in our MyPriority HSA plans.