Maybe I just got lucky, but the companies I’ve worked at the HDHP was significantly less expensive but also HR would encourage fully funding the HSA when you select it (one of them auto enrolled a substantial amount in HSA). There was still savings vs other plans even after fully funding. Also, both companies directly funded a portion of the HSA which I believe is common.

I don’t know if there’s HDHPs on the marketplaces but I’m not sure they should be. And I know that medicare plans are not HDHPs (this is mentioned in the article) since they don’t make sense for people who are struggling. But I think for people in the middle they are a really good option that should be encouraged.

I have heard of people using them as second retirement funds, but my family has always had enough medical costs to consume the value.

But HDHP plans cover you for catastrophic issues. The only gap is paying the deductible which is no problem if you have a funded HSA.

For instance, if you go to the hospital and get a $50k bill.

• on an HDHP plan, you might have a $2500 deductible, but you also have a $2500 set aside tax free in your HSA. You pay the deductible with the HSA money and the rest is covered by insurance. Out of pocket $0.
• on a regular plan, you may have a $1000 deductible, but no HSA. You cover the deductible out of pocket and the insurance comes out for the rest. Out of picket $1000.

Now you may also have worse coverage.

• on an HDHP plan you might have a $10,000 deductible. You have the maximum set aside in an HSA this year (and you’ve never saved anything into your HSA in xears past) so you only have $3850. Out of pocket $6150.
• on a regular plan you might have a $5000 deductible. You have no HSA. Out of pocket $5000.

I agree the second kind of plans should be restricted, but they are the more affordable ones. But being able to negotiate for smaller issues and being covered for catastrophic ones by insurance is the way we handle most other things.

For instance, you handle your own oil changes, car washes, and tire rotations. Insurance only steps in when you wrap the car around a tree. If those services were all included, car insurance would skyrocket.

I’ve not had a HDHP with a higher deductible than the annual HSA max (for my family), but I agree if you end up in that boat it’s just self insuring for smaller claims which is frustrating. I think there should be a max deductible on the plan that matches up with the HSA max contribution so there’s not a self insuring gap.

But I think there are benefits to having control of my smaller, regular healthcare purchases. I don’t need approval to go to physical therapy, and I can buy over the counter stuff, eyeglasses, etc. without asking Anthem, Cigna, or Huamana for permission. So I favor the plans that bring control to consumers as long as they don’t leave people with big coverage gaps.

These are smart plans. They usually come with an HSA and most employers contribute to it. Combined, it means for me I never come out of pocket for healthcare costs. But it also means I can negotiate cash prices with providers when it makes sense and purchase health related products and services with tax free money without getting pre-approval or talking to an insurance company.

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