High Deductible Health Plan (HDHP)

What Does High Deductible Health Plan (HDHP) Mean?

A high deductible health insurance plan (HDHP) is a health insurance plan with a lower premium and a higher deductible than a more traditional health insurance plan like an HMO or a PPO. Some HDHP plans also come with additional wellness benefits, which are provided before the deductible is paid.

An HDHP is also known as a consumer-directed health plan.

Insuranceopedia Explains High Deductible Health Plan (HDHP)

Some HDHP plans come with additional wellness benefits, which are provided before the deductible is paid. High-deductible health plans are a form of catastrophic coverage intended to provide coverage for catastrophic illnesses.

High deductible health plans are typically paired with a health savings account (HSA) to allow the insured party or their employer to make tax deductible contributions. Individuals can use the HSA to pay for medical expenses, free of taxes.

There are contribution limits, and the HDHP out-of-pocket maximum is the maximum amount an individual or their family are required to pay on an annual basis.