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Home > Health Insurance Basics > HMOs, PPOs & Other Health Insurance > High-Deductible Plans

High-Deductible Plans

Young couple looking at paperworkHigh-deductible plans are a kind of health plan. They have lower premiums but higher deductibles, compared with typical health plans. They are often combined with a Health Savings Account (HSA). You or your employer can put tax-free money into the HSA and use it to pay for your high deductible.

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Your costs in a high-deductible plan

The deductible is the amount you must pay each year for health care before your health plan starts to pay. With a high-deductible plan:

  • Your deductible is at least $1,250 per person, or $2,500 for a family. The deductible can be much higher.
  • You also have an out-of-pocket limit. This is the most you have to pay for most health care services in one year (in addition to your premiums). It includes your deductible.
  • You may also have a tax-free Health Savings Account (HSA).  You can use an HSA to pay for your medical care before your plan starts to pay.
  • Be sure to ask your plan about its rules.

 

Care you can get before you pay your deductible

Your plan may pay for preventive care before you pay your deductible. Be sure to use these free services. 


Pros and cons of high-deductible plans

The plans usually work best if you do not need a lot of care. If you have a chronic condition, you may pay a lot of out-of-pocket costs.

If you do need to buy a high-deductible plan, ask which services are covered before you have paid your deductible. And try to start a Health Savings Account (HSA).


Resources

For information on Health Savings Accounts and high-deductible plans, read Form 969 from the Internal Revenue Service. Search for form 969 at
www.irs.gov.
 

 

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