High-Deductible Health Insurance Defined

High-deductible health insurance is a specific category of health insurance that includes higher deductible levels as a trade-off for lower monthly premiums. Many plans connect to health savings accounts (HSA).

Features

• Deductibles on high deductible health insurance are commonly between $1,000 and $5,000. The insured must pay up to this amount on claims before insurance benefits kick in. Connected HSA accounts allow pre-tax contributions toward medical payments. The tax savings helps offset deductible payments.

Benefits

• Americans save about 40 to 50 percent in health insurance premiums on average with a high-deductible health plan tied to an HSA account, according to HSA for America. Many HSA plans allow for year-to-year rollover of savings toward medical payments. Some employers offer matches to health savings contributions.

Considerations

• Some medical professionals consider high deductible plans controversial, including Kathleen Stoll, director of health policy at the health care advocacy group Families USA. Stoll states that lower-income families may avoid getting needed medical attention since they would have to pay amounts up to the deductible out-of-pocket. A study from investment firm Fidelity supports this risk concern; its findings indicated that many people insured with high-deductible policies avoid treatment at times.