• High-deductible or not?Health image by Greg Carpenter from Fotolia.com
  
  A high-deductible health plan (HDHP) is a health insurance policy that requires a high out-of-pocket minimum, or deductible, before the insurance policy will cover claims. According to CNN, high-deductible health care plans have a high annual deductible of $1,000 to as much as $10,000 for family coverage. While HDHPs can require large out-of-pocket expenses, they have some notable advantages over lower deductible plans.
  
  

Premiums

• Similar to carrying high deductibles on auto insurance, HDHPs can result in lower monthly health insurance premiums. Considering the high cost of health insurance, lower premiums can be an important source of savings for individuals or families. Lower monthly premiums can be especially beneficial to those who rarely use health care and are very healthy, such as young people. Some health insurers offer "catastrophic" health care coverage with very high deductibles of $5,000 to $10,000 for an individual. This type of plan can protect otherwise healthy people from unforeseen health issues that could lead to exorbitant expenses such as the discovery of cancer or the sudden need for surgery. As with all insurance, the size of the deductible that you should have will depend on the amount of risk you are willing to assume and the likelihood that you will need to use care.
  
  

Health Savings Accounts

• Another benefit of HDHPs is that many are bundled with a health savings account (HSA). An HSA is a special savings account that a person can contribute money toward for future medical expenses on a pretax basis. Essentially, the HSA gives you the opportunity to save the money that you would be spending on higher premiums under a low deductible plan toward medical expenses that may arise later on. This option can be beneficial to those who do not have any immediate medical concerns. The fact that money can be saved on a pretax basis means that it is easier to save and grow money in the account. The money in the account can be used toward paying the deductible of your HDHP if desired. Any money saved in the account rolls over to the next year, so the account can potentially grow tax-free for many years before you ever have to tap into it.
  
  

Common Expenses

• While HDHPs require a large out-of-pocket cost to cover large medical expenses, they may have allowances for certain types of common expenses before you have to pay the deductible. For instance, some plans may pay for a certain number of doctor's visits, emergency room visits, prescription drugs, and other preventative care screenings before you have to pay out of pocket.