Amid rising health insurance costs and a tough economy, a growing number of consumers and employers are turning to high-deductible health plans (HDHPs), often known as "catastrophic health insurance."These plans feature lower-than-average premiums in exchange for higher-than-average deductibles, and many on the market today are paired with tax-advantaged health savings accounts (HSAs).
Under a high-deductible health plan, you pay for all your medical expenses – except for qualified preventive care – up to the annual deductible. After that, some plans pay 100 percent of your covered medical expenses. Others initially pay a share of your medical bills – such as 80 percent – before paying 100 percent when you reach an out-of-pocket maximum.
These plans are sometimes referred to as catastrophic health insurance plans, but the name is a bit of a misnomer. Under health care reform, the plans must cover 100 percent of preventive care, even before you pay the deductible.
In addition, many of the plans cover a full range of health care services – not just hospital and emergency medical costs you might associate with catastrophic care.
The HSA health insurance option
HSA-qualified, high-deductible health plans are a popular option today. Made possible by a federal law that went into effect Jan. 1, 2004, these plans are coupled with a health savings account that lets you set aside pre-tax money to use for medical care today or in retirement.
"More and more consumers are looking for ways to save money on health care and on taxes, so they're taking another look at HSAs," says Ellen Laden, a spokeswoman for Golden Rule Insurance Co., which underwrites individual health insurance plans for UnitedHealthcare.
Golden Rule pioneered the first medical savings account in 1993, a forerunner to the HSA. Just under 30 percent of Golden Rule's individual customers choose HSA-eligible plans, and Laden says the company is seeing an uptick in interest.
Under a high-deductible health plan, you pay for all your medical expenses – except for qualified preventive care – up to the annual deductible. After that, some plans pay 100 percent of your covered medical expenses. Others initially pay a share of your medical bills – such as 80 percent – before paying 100 percent when you reach an out-of-pocket maximum.
These plans are sometimes referred to as catastrophic health insurance plans, but the name is a bit of a misnomer. Under health care reform, the plans must cover 100 percent of preventive care, even before you pay the deductible.
In addition, many of the plans cover a full range of health care services – not just hospital and emergency medical costs you might associate with catastrophic care.
The HSA health insurance option
HSA-qualified, high-deductible health plans are a popular option today. Made possible by a federal law that went into effect Jan. 1, 2004, these plans are coupled with a health savings account that lets you set aside pre-tax money to use for medical care today or in retirement.
"More and more consumers are looking for ways to save money on health care and on taxes, so they're taking another look at HSAs," says Ellen Laden, a spokeswoman for Golden Rule Insurance Co., which underwrites individual health insurance plans for UnitedHealthcare.
Golden Rule pioneered the first medical savings account in 1993, a forerunner to the HSA. Just under 30 percent of Golden Rule's individual customers choose HSA-eligible plans, and Laden says the company is seeing an uptick in interest.
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