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High Deductible Health Plans On their own, high deductible health plans are only useful in the case of catastrophic illness or injury. A deductible is a monetary threshold at which your insurance will begin picking up the tab for your medical expenses. If this figure is high, the insurance is only useful if you expect extensive medical bills (such as recovery from serious illness or accident). Choosing High Deductible Health Plans Of course, having any kind of health insurance is better than having none. Nevertheless, there are situations where high deductible health plans are chosen as part of an overall health care approach. For example, they are required when opening an HSA or an MSA. Because of the high deductible, HDHPs are far less expensive than most health plans. HSAs are separate health savings accounts. These accounts work in a way similar to IRAs. Individuals put tax-exempt money into them and use the account to pay for most of their medical expenses. The high deductible health plans are there for when there is a need for more extensive coverage. When coupled with a take care HSA, high deductible health plans need to have a minimum deductible of $1,050 for individuals and $2,100 for families in 2006 ($1,100 for individuals and $2,200 for families in 2007). Although MSAs (medical savings accounts) work similarly to HSAs, they are limited to self-employed individuals and small businesses. Additionally, they allow significantly less money to be placed into the account - which is why HSAs have rapidly become a more popular option. |
Additional Topics Consumer-Directed Health Plans Consumer-Driven Health Accounts Dependent Care Flexible Spending Accounts Flexible Health Spending Accounts Flexible Medical Expense Accounts Health Care Flexible Spending Accounts Health Reimbursement Arrangements IRS Section 125 Cafeteria Plans Medical Expenses and Income Tax Plan for Medical that Health Insurance Doesn't Cover Save 25% to 40% on Health Expenses Save on Co-Pays and Over-the-Counter Medications Save on LASIK and Orthodontic Costs Section 125 Plan Administration |
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