How to make a high-deductible health plan and HSA work for you
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Many people who switched to high-deductible health plans to keep costs down may face steep out-of-pocket costs when they need care. A health savings account (HSA) can help prepare for these costs by allowing individuals to save pretax money for qualified medical expenses.
High-deductible health plans offer lower monthly payments but require patients to pay a significant amount out-of-pocket before insurance kicks in. In 2023, 30% of people with employer-provided insurance had a high-deductible plan. To prepare for these costs, individuals can use a health savings account (HSA), which allows them to save pretax money for medical expenses. HSAs are available to those enrolled in lower-tier plans, including bronze and catastrophic coverage. They offer a triple tax advantage, lowering taxable income, growing tax-free, and allowing tax-free transactions for qualified medical expenses. By using an HSA, individuals can build a cushion for future health costs, such as doctor visits and prescriptions.
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