A high deductible health plan (HDHP) is a plan with a higher deductible than traditional health insurance. Premiums may be lower, but you will have to face a higher deductible (paying out of pocket for more healthcare costs) before your coverage hits. An HDHP is often combined with a health savings account (HSA), which allows you to set aside dollars before taxes to pay for medical expenses, which reduces your federal income tax.
The IRS has a specific definition of a high-deductible health plan that can be changed annually. For 2022, an HDHP is defined as a health plan with a deductible of at least $ 1
,400 for an individual or $ 2,800 for a family, according to HealthCare.gov. The total annual expenses may not exceed $ 7,050 for an individual or $ 14,100 for a family. This includes deductibles, co-insurance and copayments but does not include health insurance premiums. The withdrawal maximum does not apply to costs for healthcare received from the health plan’s network.How do high-risk health plans work?
The main benefits of an HDHP are:
- It helps you save money on monthly health insurance premiums; and
- It allows you to open a health savings account (HSA).
If you do not anticipate many medical expenses for the coming year, it may make sense to choose a health plan with a high deductible with lower premiums. Choosing an HDHP also entitles you to contribute to a health savings account, which reduces your taxable income. You can use HSA dollars before tax to cover medical expenses before you meet your deductible and for co-insurance or copayments when the deductible is met.
How about preventive care with a health plan with a high deductible?
Another benefit of an HDHP is that it provides 100% coverage before you meet your deductible for preventive healthcare services from network providers. This is a requirement under the Affordable Care Act. For services under the category of preventive care, you are not responsible for any co-insurance or co-payments. Prevention services that are 100% covered include:
- Blood pressure test
- Cholesterol screening for adults of a certain age or at higher risk
- Colorectal cancer screening for adults aged 50 to 75
- Type 2 diabetes screening for adults between the ages of 40 and 70 who are overweight or obese
- Some adult vaccinations, including influenza vaccinations
- Contraceptives for women
- Anemia screening for women
- Mammography every two years for women over 40
- Cervical cancer screening for women aged 21 to 65
- Osteoporosis screening for women over 60 years
- Well-woman visit for women under 65 years
- Autism screening for children at 18 months and 24 months
- Vaccines for children
A high-risk health plan may be the best choice for young and healthy individuals who are not on prescription medications, do not have young children and do not plan to start a family. Young children tend to visit doctors more often and the cost of giving birth in a hospital is high. Our agent can advise you on your options and help you choose the best health plan for you and your family.
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