What is HDHP?
HDHP refers to a health insurance plan called “High Deductible Health Plan”. From the term itself, it is a type of health insurance plan that involves a high deductible but with low premiums. Deductible is the amount a person is required to pay the insurance company before it could give out the benefits stipulated in the particular plan. Usually, deductibles are set and specified for a given policy year and are adjusted on a yearly basis. Most HDHPs in the US require the payment of about 2000 dollars as deductible. With the deductible this high, one could expect that the monthly premiums are very low.
Most HDHP are used only in emergency or catastrophic cases. Most people that avail of this type of health insurance coverage are also aware that in case an emergency indeed arises, he/she may have to pay the deductible in order for the insurance company to cover the medical bills beyond the deductible paid. Although HDHP requires an initial cash outlay of a relatively large amount of money, many people still avail of this plan because of the lower premiums. On the side of the insurance company, they are able to lower premiums because there is little risk that the plan-holder will be able to avail of his health insurance benefit under the emergency coverage. The lower premium is also what entices people to avail of this health plan. But since HDHP is designed to cover medical bills only in emergency and catastrophic cases, people are still advised to get a standard health plan for basic medical coverage.
But aside from emergency health coverage, some High Deductible Health Plans also feature preventive health care. Coverage may include wellness services, immunization benefits, and doctor’s consultations. Some HDHPs also include discounts when availing medical services from its accredited network of medical providers.