What is a high-deductible health plan?

If you have been shopping for the right health insurance plan for yourself or your family, you may be astounded by all the options available today. Group health insurance, HMOs, PPOs, POS plans, indemnity health plans, and high-deductible plans all offer their subscribers something different. While each has pros and cons, a high-deductible-health plan is often attractive to those who are lower income, self-employed, or who for other reasons prefer the generally low monthly premiums of a high-deductible plan.

A high-deductible plan is often able to be used with a health savings account, a savings plan that allows you to accrue funds tax-free to be used for qualified health expenses. Health coverage may be limited to a specific network of providers, much like an HMO, or coverage may be extended to both in-network and out-of-network providers, much like PPOs.

In order to be considered a high-deductible individual health insurance plan, the plan must have a minimum deductible of $1,200 and maximum out-of-pocket expenses of $6,050, as of 2012.

High-deductible plans often cover specific expenses. Plans may or may not cover office visits, prescriptions, and routine medications. Medical care must be paid out of pocket until the deductible and other plan requirements are met. Once the deductible is met, the insurance will kick in. Where a high-deductible plan can really help is with the major expenses such as surgery or costs associated with unexpected or serious illness.

Monthly premiums tend to be quite low with this type of insurance, making it extremely affordable, and the health savings account can be used to cover the deductible. If you or your family has few health issues, a high-deductible health plan can be an affordable answer to the high costs of health care. You can enjoy the security of insurance to protect you from catastrophic expenses without having to pay for coverage you don’t necessarily need or use.

 

 

Source: Los Angeles Health Insurance

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