High-Deductible Health Plans (HDHPs) are becoming increasingly popular, especially among people looking to lower their monthly premiums. But like any plan, they come with trade-offs. Here’s what you need to know before enrolling.

What Is an HDHP?

An HDHP is a health insurance plan with a higher deductible than traditional plans. In 2025, an HDHP is defined as having a deductible of at least:

  • $1,650 for an individual

  • $3,300 for a family

It must also have a maximum out-of-pocket limit no higher than:

  • $8,300 for an individual

  • $16,600 for a family

These plans are often paired with a Health Savings Account (HSA).

✅ Pros of HDHPs

Lower Premiums:
You’ll typically pay less each month than with a traditional plan.

HSA Eligibility:
You can contribute pre-tax dollars to an HSA, which can be used for qualified medical expenses now or in the future.

More Control:
You decide how and when to spend your healthcare dollars.

Portability:
Your HSA stays with you, even if you change jobs or retire.

❌ Cons of HDHPs

High Upfront Costs:
You pay more out-of-pocket before coverage kicks in, which can be a burden if you face unexpected medical expenses early in the year.

Not Ideal for Chronic Conditions:
If you need frequent care or expensive medications, the higher deductible may offset any premium savings.

Risk of Skipping Care:
Some people avoid needed care because they don’t want to spend money from their HSA or pay toward their deductible.

Final Thoughts

A High-Deductible Health Plan can be a smart choice if you’re generally healthy and want to lower your monthly costs while saving for the future. But if you expect significant medical needs, it might be worth paying more for a lower-deductible plan. Always compare total costs—not just the premium—when choosing coverage.