What is a high-deductible health plan?
High-deductible health plans trade off lower monthly premiums for higher out-of-pocket costs, largely in the form of a deductible that must be paid before coverage kicks in.
"The burden of higher and higher health care costs has been shifted to the consumer, through higher deductibles, instead of the insurance companies," says Dr. Dana Simpler, a doctor of internal medicine at Mercy Medical Center in Baltimore.
A high-deductible health plan is defined by the IRS as one with an individual deductible of at least $1,400 or a family deductible of at least $2,800. While the out-of-pocket maximum is capped at $7,050 for individuals and $14,100 for families, that’s still a lot of money for many families.
There are options, however, to help you keep that low monthly premium while still getting the care you need.
How to save money with a high-deductible health plan
With the right approach, a high-deductible health plan can work for your budget as well as your healthcare needs. These eight tips will help you get the most out of your health insurance.
1. Get the right level of care
Emergency room visits are expensive, so choose another option if possible. And don’t delay preventive health care services, which can prevent you from needing medical care in the future and are covered without charge on ACA plans.
Get care sooner and less expensively instead of waiting until your situation becomes acute and you're heading to the emergency room, says Sam Ho, chief medical officer for UnitedHealthcare.
If you have a minor health issue, consider a drug store clinic or a telehealth visit from your home, both of which may cost less than an office visit. If it’s not an emergency, choose urgent care over the ER when you need immediate care.
2. Shop around for health care services
Before seeking care, you can shop in advance to check the prices of procedures and medical services.
Two options include Fair Health Consumer, which gives estimates based on claims information they receive on medical and dental services across the country, and Healthcare Bluebook, which bases its information on a database of rates paid by private insurers.
You also can call providers in your area to see what they charge for various services. Explain that you have a high-deductible health plan and need help minimizing costs.
3. Use in-network providers
Getting care outside of your network can increase your costs substantially. A health maintenance organization (HMO) likely won't reimburse you for any out-of-network services. A preferred provider organization (PPO) may charge you double or more for out-of-network care.
"Know what health care providers are in your insurer's network," says Ho. "You'll pay lower rates for services provided by hospitals, physicians and others in your network."
You may also pay a lower deductible when you receive services from health care providers who are in your network.
Your insurance company should have a provider directory or "find a doctor" tool so you can see what providers are in-network.
4. Save on medication costs
Generics are the way to go, if possible.
"To save on drug costs, try generic medications," Simpler advises. "Or if it's a new medication, ask if your doctor can provide you with a free sample. Otherwise, you might buy a month's supply of medication and three days into it, find you can't tolerate it."
Pharmaceutical companies may offer their own assistance. Patient assistance programs (PAPs) are run by pharmaceutical companies and give away billions of dollars worth of drugs to patients who meet certain eligibility criteria, says Richard Sagall, president of the nonprofit NeedyMeds. Criteria vary from program to program.
Drug makers may have co-pay cards available, which help reduce the price you pay for medication.
Another option is a drug discount card. Cards may be available from state governments, pharmaceutical firms, retailers or nonprofits. But Sagall cautions some carry high upfront fees. Those obtained from nonprofits are often free or low-cost.
5. Ask questions to reduce health care costs
Don't be afraid to ask your physician about costs upfront, Simpler says, and ask about a less expensive alternative to what your doctor recommends. Be upfront about the fact that you are trying to minimize costs due to your high-deductible health plan and need to explore the least expensive viable option.
You can also question whether all the tests your doctor orders are essential. "Try conservative things first" before you opt for surgery, she says.
6. Negotiate prices
In some cases, you can negotiate with your provider to pay a lower price for services, or you may receive a discounted price if you offer to pay your bill in cash.
You also may be able to pay your bill over time rather than in one lump sum.
7. Take advantage of wellness incentives
"An increasing number of employers are offering wellness incentives. These programs provide rewards if you quit smoking, lose weight, or make other positive health changes," Ho says.
You might earn a major discount on your health insurance premium or gain other perks for taking part. Bonus: you may also improve your health.
8. Set up an HSA or FSA
There are two options to combine high-deductible health insurance plans and savings accounts. Both allow pre-tax contributions.
A health savings account (HSA) or a flexible savings account (FSA) can both be set up by your employer, although you can also set up an HSA on your own. Your employer may contribute to these accounts on your behalf.
You can pay eligible healthcare expenses from either account, and withdrawals are tax-free. Among the key differences: FSAs are use-it-or-lose-it, while HSAs roll over at the end of the year. Research both before you decide to pick the right plan for your needs.
Benefits of a high-deductible health plan
While high-deductible health insurance plans aren't for everyone, they may make sense for those who are generally healthy and prefer to pay the lowest possible health insurance premiums. Carefully consider the pros and cons of high-deductible health insurance.
Make sure you have compared high deductible health plan quotes and selected the plan that works best for your healthcare needs and budget.
Silver plans provide a good balance of monthly premiums with out-of-pocket costs. Coinsurance is 70% with a silver plan, meaning you will pay 30% of the costs after your deductible is met, up to the out-of-pocket limit. Silver plans are a good choice for people who are in generally good health but don't want high out-of-pocket costs if something goes wrong. Bronze plans are a popular choice with those who value low monthly premiums and are willing to pay more when they need care. Coinsurance is set at 60%, meaning you will pay 40% if you do need care, up to the out-of-pocket limit. Bronze plans are good for those who don't expect to need many services outside of preventative care throughout the year.
ACA platinum plans have the highest monthly premiums, but the lowest out-of-pocket costs. You'll pay more monthly in return for lower deductibles, copays and coinsurance amounts. Coinsurance with platinum plans is 90%, which means you pay 10% after the deductible, up to your out-of-pocket limit. Platinum plans are good for those who anticipate a lot of medical needs throughout the year.
Gold plans cost a little less than platinum plans, and come with higher out-of-pocket costs. The coinsurance amount on a gold plan is 80%, which means you pay 20% after the deductible, up to your out-of-pocket limit. A gold plan is a good idea if you think you'll need a lot of care throughout the year, but don't want to pay platinum premiums.Health insurance finder tool
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Employer-sponsored health insurance
Preferred-provider Organization (PPOs)
Preferred-provider organization (PPOs) plans are the most common type of
employer-based health plan. PPOs have higher premiums than HMOs and HDHPs, but
those added costs offer you flexibility. A PPO allows you to get care anywhere
and without primary care provider referrals. You may have to pay more to get
out-of-network care, but a PPO will pick up a portion of the costs.
Find out more about the differences between plansHealth maintenance organization (HMO)
Health maintenance organization (HMO) plans have lower premiums than PPOs.
However, HMOs have more restrictions. HMOs don't allow you to get care outside
of your provider network. If you get out-of-network care, you'll likely have to
pay for all of it. HMOs also require you to get primary care provider referrals
to see specialists.
Find out more about the differences between plansHigh-deductible health plans (HDHPs)
High-deductible health plans (HDHPs) have become more common as employers look
to reduce their health costs. HDHPs have lower premiums than PPOs and HMOs, but
much higher deductibles. A deductible is what you have to pay for health care
services before your health plan chips in money. Once you reach your deductible,
the health plan pays a portion and you pay your share, which is called
coinsurance.
Find out more about the differences between plansExclusive provider organization (EPO)
Exclusive provider organization (EPO) plans offer the flexibility of a PPO with
the restricted network found in an HMO. EPOs don't require that members get a
referral to see a specialist. In that way, it's similar to a PPO. However, an
EPO requires in-network care, which is like an HMO.
Find out more about the differences between plans
Learn more about individual insurance plans
Know more individual insurance / ACA 
Know more individual insurance / ACA 
Frequently asked questions
How do I know if I have a high-deductible health plan?
Your plan will be labeled as an HDHP plan, so watch for that when you buy your health plan. Another easy way to tell: if you are offered an HSA, you have a high-deductible plan. HSAs are only available to people who have an HDHP.
How much is high-deductible health insurance?
The cost varies. According to the Kaiser Family Foundation, the average employer-sponsored HDHP plan in 2021 cost $1,242 annually for a single person and $5,129 for a family.
How does a high-deductible health plan work?
With a high-deductible health plan, you pay most of your healthcare costs upfront (some preventative services are cost-free) until your deductible is met, after which you’ll pay your plan’s coinsurance or copay amounts. Once you meet your out-of-pocket maximum, all healthcare needs are covered at 100%
Should I get a high-deductible health plan?
Choosing a health plan is a very personal decision, so it’s important to weigh the pros and cons of all of your options. HDHPs are usually recommended for people who don’t anticipate a lot of medical costs throughout the year.
