HDHP (High-Deductible Health Plan)

An HDHP is a health plan with a deductible above IRS-set minimums ($1,600 individual / $3,200 family for 2024) and an out-of-pocket maximum below IRS-set ceilings ($8,050 / $16,100). Meeting both bars makes the plan "HSA-qualified," which lets the member contribute to a Health Savings Account. Most plans people call "high-deductible" in casual conversation are actually HDHPs in the IRS technical sense.

The design tradeoff: lower premium, higher deductible. A family HDHP might cost $400 less per month than a traditional PPO but carry a $6,000 deductible instead of $2,500. For a healthy family, that math works — save on premium, pocket the difference in the HSA. For a family with a chronic condition or a scheduled surgery, the higher deductible bites hard early in the year. HDHPs are the fastest-growing plan type in the employer market, partly because they let employers pair them with HSA contributions and partly because they push members to shop for care — which they only actually do if given the tools to see prices.

The takeaway: an HDHP is a great deal when you have transparent pricing and an HSA you're funding. Without those two pieces, it's just a plan with a big deductible.