The steep rise in medical expenditure often creates an impediment in accessing healthcare facilities. Herein arises the necessity and need of a health insurance plan. A foolproof plan can assist us in times of dire medical need. However certain sections of the populace are still new to the concept of health insurance details. The medical and financial aid required is a variable factor among the individuals. The listed health insurance details are determined by the monetary condition, medical history and general preference.
A high deductible health plan is one such policy that involves the option of lower premiums. Let us go through the plan details in order to understand what is HDHP.
WHAT IS HIGH DEDUCTIBLE HEALTH PLAN (HDHP)?
A high deductible health plan involves lower premiums and higher deductibles than a conventional insurance plan. A higher deductible implies that the insured pays a higher share of the medical expenses. It is more suitable for people who are not suffering from any terminal illness. Through a high deductible health plan, one can opt for a lower premium payment. The insurance company provides financial coverage only after the individual hits the threshold for the deductible. The out of pocket expenses of the individual is definitely higher than other plans. Thus, HDHP is combined with Health Savings Account (HSA) to attain financial support for the out-of-pocket expenses.
A deductible is the amount of insurance that the insured pays out-of-pocket. By opening an HSA account one can make the withdrawals to pay the equivalent of out-of-pocket expenses. It is non-taxable as long as these medical expenses are not under a high deductible health plan. Thus, people who are relatively less prone to illness can use this plan to their advantage. A lower premium payment further makes it more affordable. The minimum deductible for individuals is $1350 and $2700 for families.
IS HDHP BETTER THAN PPO?
Both the plans cater to different sort of needs for the individual. Thus, it is difficult to conclude is HDHP better than PPO. They both provide healthcare amenities and medical provision. HDHP plans have lower premiums with higher deductibles and PPO plans have co-pays with lower deductibles. The monthly expense of a PPO plan is also more than the amount payable for HDHP. In the case of HDHP, the insured parties can gain additional support from the HSA account. It also eliminates the tax payable for their medical expense.
PPO is preferable in cases where the individual is subject to prolonged hospitalization or terminal illness. Owing to the lower deductible, one can attain the financial coverage earlier. Thus, in case of grave medical treatments, one can save on the out-of-pocket expenses incurred. Is HDHP better than PPO, is a debatable matter as both come with their own set of pros and cons.
An understanding of the health insurance details is important before one decides to opt for it. HDHP is feasible for individuals who can anticipate their medical costs to be lower. Thus, one can pay a minimum premium on a timely basis and access quality healthcare. Thorough knowledge of the health insurance details can keep us prepared for any future medical urgency.