Question

What piqued your curiosity about high deductible health plan? Explain in 1 paragraph

Answer 1

High Deductible Health Plan:

A high-deductible health plan (HDHP) is a plan aim to combine the benefits of small savings while providing a medical cover. A deductible is the amount paid by the insured before the service provider pays for the expenses. People who opt for such plan want to save amount using their premiums and do not intend to use their medical coverage extensively. Such plans offer the benefit of creating an additional fund to meet your medical expense requirements and the fund value can be utilized against reimbursement of medical bills, diagnosis expenses and other expenses one might incure while undergoing a treatment.Such plans also offer tax exemptions on savings accrued under the account. Disadvantage of such plans is that the amount can only be withdrawn against medical expenses. So it is restrictive in the nature of its usage. Secondly the premiums tend to be bit high as insurance company may invest your premium into ULIP or other funds to help it grow and charge you with other charges like fund maintenance charges which is not related to health insurance.

To qualify as a high-deductible health plan for 2017, the plan must have a deductible of at least $1,300 for individual and $2,600 for family. For self coverage minimum annual deductible is $1,300 and for family coverage minimum annual deductible is $2,600. (Ref. Publication 969(2017), IRS)

For example, in a plan with $500 premium and $5,000 deductibles, a consumer must pay $5,000 prior to the amount paid by the provider of the plan.