The $3,500 deductible option means your health plan benefits kick in after you pay $3,500 out of your own pocket. You can: (1) choose your coinsurance, (2) choose your office visit copay, and (3) choose your prescription drug benefits to create a plan just for you or for your whole family.
Per IRS guidelines in 2025, an HDHP is a health insurance plan with a deductible of at least $1,650 if you have an individual plan or a deductible of at least $3,300 if you have a family plan. The deductible is the amount you'll pay out of pocket for medical expenses before your insurance pays anything.
The benefits of a high-deductible versus a low-deductible medical plan. In 2023, health insurance plans with deductibles over $1,500 for an individual and $3,000 for a family are considered high-deductible plans.
How much does a high-deductible health plan cost? On average, if you are a covered employee with a high-deductible health plan in the United States, you may pay $8,217 annually and $22,404 for a family.
A high-deductible plan is any plan that has a deductible of $1,600 or more PDF opens in new tab for individual coverage and $3,200 or more for family coverage in 2024. Compared to a traditional health insurance plan, a high-deductible health plan comes with a higher deductible and lower premium.
HDHPs typically have higher deductibles and lower premiums than traditional (nonhigh deductible) health plans. In 2023, the median annual deductible for private industry workers participating in HDHP plans was $2,500.
Cons of High Deductible Healthcare Plans
Individuals who are stretched thin for funds may delay or avoid seeking medical treatment due to the high cost of treatment. For example, someone injured may avoid the emergency room if they know it will result in an expensive bill that will be applied to the plan deductible.
There aren't any hard statistics on this, but industry sources say a $500 deductible is considered “standard.” There are good reasons to opt for a higher deductible, though…
The report says that more than 55% of Americans were enrolled in HDHPs in 2021, a new record. The rate rose from 30.3% in 2013 (the lowest enrollment in the 10 years studied) to 55.7% in 2021, an 83.7% increase. Much of the rise is attributed to increase health care costs, according to experts.
Yes, a $2,500 deductible is good for car insurance if you want a lower monthly premium. The most common deductibles are $500 and $1,000, but a higher deductible can be a good option if you can afford to pay more out of pocket in the event of a claim.
Drawbacks of HSAs include tax penalties for nonmedical expenses before age 65, and contributions made to the HSA within six months of applying for Social Security benefits may be subject to penalties. HSAs have fewer limitations and more tax advantages than flexible spending accounts (FSAs).
You would most likely benefit from a low-deductible plan if you're older, have a chronic condition, or simply receive frequent medical care. Having an LDHP can save you money if you have costly health issues or a larger family.
Deductibles are cumulative annual amounts. While copays are fixed amounts paid per service. Additionally, copays are usually a predictable fixed cost, whereas deductibles can lead to more variable out-of-pocket expenses depending on the healthcare services used.
Under the section heading Health Savings Account (HSAs), the paragraph under Eligibility, a qualifying HDHP must have a deductible of at least $1,600 for self-only coverage and $3,200 for family coverage.
The IRS defines high-deductible health plans for 2023 as: Individual plans with deductibles of at least $1,500. Family plans with deductibles of at least $3,000.
For individuals, a health plan can qualify as high deductible if the deductible is at least $1,350, and the max out-of-pocket cost (the most you'd pay in a year for medical expenses, with insurance covering everything else) is at least $6,750.
$500 is the most common car insurance deductible. Not every type of car insurance coverage uses a deductible. A higher car deductible can lower your insurance premium. You pick your deductible when buying insurance.
Large medical expenses: Since HDHPs generally only cover preventive care, an accident or emergency could result in very high out-of-pocket costs. Future health risks: Because of the costs, you may refrain from visiting a physician, getting treatments, or purchasing prescriptions when they're not covered by your HDHP.
What is a typical deductible? Deductibles can vary significantly from plan to plan. According to a KFF analysis, the 2024 average deductible for individual, employer-provided coverage was $1,787 ($2,575 at small companies vs. $1,538 at large companies).
High deductible health plans can be a great option for healthy individuals and families who don't need a lot of medical care. They offer lower monthly premiums and tax benefits through HSAs. But, if you need a lot of medical care, high deductible health plans can be expensive.
Dave recommends purchasing health insurance through your employer when possible to keep costs low. Compare options to find the best coverage for your needs. Choose a plan with a Health Savings Account to help you to put money away with tax benefits to cover medical costs.
Once a person meets their deductible, they pay coinsurance and copays, which don't count toward the family deductible.