Definition

An HDHP trades a higher deductible for a lower monthly premium and is the only kind of plan that lets you contribute to a Health Savings Account. It can be cost-effective for relatively healthy people who can cover the deductible, especially when paired with HSA tax advantages. Heavy medical users may prefer a lower-deductible plan.

1. Health Savings Account (HSA)

   A triple-tax-advantaged account for medical expenses, available with a high-deductible health plan.
2. Deductible (Insurance)

   The amount you pay out of pocket before insurance starts covering a claim.
3. Out-of-Pocket Maximum

   The most you will pay for covered health care in a year before insurance covers 100%.