What are high-deductible health insurance plans?

Open enrollment — the window during which you can sign up for health insurance or make adjustments to your current plan — starts Nov. 1. With it, there comes a whole lot of jargon to wade through before you can make some very financially consequential decisions. One term you might come across is a high-deductible health plan, or HDHP.

In recent years, there has been a “growth of high deductible plans, which offer lower monthly premiums but require consumers to pay most initial medical costs out of pocket before the plan’s coverage kicks in,” said The Washington Post. That is likely because at first glance, these plan’s “cheaper premiums may look like a bargain” — but you will “risk paying much more” if you have “unexpected illnesses or failed to budget well for more routine care.” Read on to learn the possible risks and rewards of choosing a HDHP.

What is a high-deductible health plan?