How popular is the high-deductible health plan?
Asked by: Judy Torp | Last update: October 2, 2025Score: 5/5 (69 votes)
How many people have high deductible plans?
Twenty-seven percent of covered workers are enrolled in an HDHP/SO in 2024, similar to the percentage last year (29%) [Figure 8.4]. The share of covered workers enrolled in HDHP/SOs is similar to the share five years ago (27% v. 30%) but is higher than the share ten years ago (27% v. 20%) [Figure 8.4].
Is it worth it to have a high deductible health plan?
HDHP is great for generally healthy people who don't take medications and don't visit the doctor often. It'll cover you for very serious illnesses and you can just save the money you would have otherwise spent for the occasional doctor's visit.
Why do companies push high deductible health plans?
Although a high deductible may sound like a bad thing, in some cases, it makes financial sense. By opting for a higher deductible, employees can secure lower monthly premiums. This makes coverage more affordable, and it can be particularly appealing to young workers who do not expect to have major health issues.
When did high deductible health plans become popular?
Adoption rates of HDHPs have been growing since their inception in 2004, not only with increasing employer options, but also increasing government options. As of 2016, HDHPs represented 29% of the total covered workers in the United States; however, the impact of such benefit design is not widely understood.
High-Deductible Health Plans, Explained
What percent of people have HSAs?
The HSA ceiling: Why 90% of Americans have no access to HSAs
Unfortunately, right now, according to IRS data, only about one in ten Americans has an HSA, or about 33 million people.
What is one disadvantage to a high deductible health plan?
Cons of High Deductible Healthcare Plans
For example, someone injured may avoid the emergency room if they know it will result in an expensive bill that will be applied to the plan deductible. This reluctance is especially true for those new to a plan who have not yet established an HSA.
Why is it not a great idea to have a high deductible?
Large medical expenses: Since HDHPs generally only cover preventive care, an accident or emergency could result in very high out-of-pocket costs. Future health risks: Because of the costs, you may refrain from visiting a physician, getting treatments, or purchasing prescriptions when they're not covered by your HDHP.
Is PPO ever better than HDHP?
HDHPs can be a good form of insurance for the young and healthy — especially if your employer offers you HSA contributions. But for anyone with significant medical expenses, an upcoming surgery, or a serious health condition, a PPO could be a better fit because of the lower deductible.
Is $5000 a high deductible health plan?
For families, the deductible has to be at least $2,700, with a $13,500 max out-of-pocket. Many high deductible plans actually have a much higher deductible ($5,000-$7,000).
What is the 12 month rule for HSA?
It means you must remain eligible for the HSA until December 31 of the following year. The only exceptions are death or disability. If you violate the testing period requirement, your ineligible contributions become taxable income.
Who should not get an HSA?
HSAs might not make sense if you have some type of chronic medical condition. In that case, you're probably better served by traditional health plans. HSAs might also not be a good idea if you know you will be needing expensive medical care in the near future.
What is the upside to having a high deductible?
This means you'll pay less each month for insurance and more out-of-pocket when you receive care. The upside? Preventive care is still covered at 100 percent on these plans. Once you hit your deductible, your health plan will start to cover the cost of your other care.
What is the average cost of a high-deductible health plan?
On average, single Americans with a high-deductible health plan (HDHP) have an annual premium of $7,170, while those with a more traditional type of health plan (like an HMO or PPO) have an average premium of $8,162. For families, the premium comparison is $21,079 with an HDHP versus $23,003 without.
How popular is the HDHP?
In 2023, 49.7% of private-sector employees were enrolled in HDHPs. That's down from 53.6% in 2022, though those are still some of the highest enrollment rates by year. Enrollment peaked at 55.7% in 2021. Before 2022 and 2023, HDHP enrollment had last declined in 2013.
What percentage of Americans have a PPO?
PPOs are the most common type of health plan available. KFF1 found that 46% of the roughly 153 million Americans with employer-sponsored health coverage had a PPO policy.
Do doctors prefer HMO or PPO?
HMO plans might involve more bureaucracy and can limit doctors' ability to practice medicine as they see fit due to stricter guidelines on treatment protocols. So just as with patients, providers who prefer a greater degree of flexibility tend to prefer PPO plans.
Are HDHP plans a good idea?
HDHPs have higher out-of-pocket costs than LDHPs. So, this type of plan is best for healthy people who expect little to no healthcare expenses. If this outlines your scenario, the HDHP's lower premium will likely save you more money than you would spend on medical care.
Do copays count towards deductible?
No. Copays and coinsurance don't count toward your deductible. Only the amount you pay for health care services (like the medical bill you receive) count toward your plan's deductible.
Who should not use a high-deductible health plan?
Namely, you're responsible for paying a larger portion of your healthcare expenses out of pocket. This can be a significant financial burden for those with a lot of medical expenses and could lead to financial strain. HDHPs may not be the best choice for those with chronic or frequent medical needs.
What is the downside of a high deductible?
The primary disadvantages of a high-deductible health plan include the high out-of-pocket costs and the potential reluctance to seek medical care due to upfront expenses. While HDHPs have lower premiums, individuals may face financial strain if they need medical services before meeting the deductible.
Who are high deductible health plans best for?
An HDHP is best for younger, healthier people who don't expect to need health care coverage except in the face of a serious health emergency. Wealthy individuals and families who can afford to pay the high deductible out of pocket and want the benefits of an HSA may benefit from HDHPs.
Why do companies like HDHP?
HDHPs are cheaper for employees.
HDHPs offer lower premium costs than traditional plans like PPOs and HMO. How much less do they cost? That will vary by plan type, but we have seen nearly 40% savings premiums savings when comparing HDHPs to PPOs.
How much should I put in my HSA?
The short answer: As much as you're able to (within IRS contribution limits), if that's financially viable. If you're covered by an HSA-eligible health plan (or high-deductible health plan), the IRS allows you to put as much as $4,300 per year (in 2025) into your health savings account (HSA).
Do high deductible plans cover prescriptions?
These plans have higher deductibles.
That means you pay for doctor visits, tests and prescriptions until you meet your deductible, then and your plan begins to pay.