High-Deductible Health Plan - HDHP

AAA

DEFINITION of 'High-Deductible Health Plan - HDHP'

A health insurance plan that has a high minimum deductible, which does not cover the initial costs or all of the costs of medical expenses. The deductible forces the insurance holder to pay the first portion of a medical expense before the insurance coverage kicks in. The minimum deductible for a plan to fall into the category of an HDHP varies each year. In 2006, it was more than $1,000 for individuals and $2,000 for families.

INVESTOPEDIA EXPLAINS 'High-Deductible Health Plan - HDHP'

These health plans became more common when the new health savings account (HSA) legislation was signed into law in 2003. In order to open an HSA account, an individual must first have an HDHP. These high-deductible health plans are thought to lower overall healthcare costs by forcing individuals to be more conscious of medical expenses. The higher deductible also lowers insurance premiums, making health coverage more affordable.

RELATED TERMS
  1. Unallocated Benefit

    A provision available in health insurance policies, where the ...
  2. Preferred Provider Organization ...

    A type of health insurance arrangement that allows plan participants ...
  3. Aggregate Product Liability Limit ...

    The maximum sum of money that an insurance company will pay during ...
  4. Healthcare Power Of Attorney - ...

    A legal form that allows an individual to empower another with ...
  5. Accident And Health Benefits

    Fringe benefits provided to employees for sickness, accidental ...
  6. Deductible

    1. The amount you have to pay out-of-pocket for expenses before ...
Related Articles
  1. Fighting The High Costs Of Healthcare
    Home & Auto

    Fighting The High Costs Of Healthcare

  2. How To Avoid Medical Debt
    Home & Auto

    How To Avoid Medical Debt

  3. What Does Medicare Cover?
    Insurance

    What Does Medicare Cover?

  4. What You Need To Know About Student ...
    Insurance

    What You Need To Know About Student ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center