The HDHPs are health insurance policies that possess higher deductibles compared to traditional insurance policies. Persons with HDHPs have an advantage of paying reduced insurance premiums every month compared to individuals with the regular insurance covers. Nevertheless, people with HDHPs pay a higher amount for medical expenses out of their pockets up to the point when their deductibles are met. People with or without Health Savings Account (HSA) can use the HDHP covers. However, it is better to have an HSA account since it permits a pretax income to pay for raised costs associated with covering bills using an HDHP. The following research discusses the useful purpose of HDHPs, their advantages and drawbacks, and discussion of whether it would be safe to recommend a friend or family member to register for an HDHP plan.
Useful Purpose the HDHPs are Designed to Achieve
The HDHP is designed to help people who rarely use their health benefits in saving some funds that would otherwise be paid in high monthly insurance premiums. In addition, HDHPs were also enacted as a preferred insurance policy for employers who would like to save a sizeable amount of funds for the premium covers they pay for their employees. The HDHPs are effective for the employers because in the event of a claim, the claimant –in this case an employee – is required to settle some of the medical expenses from his/her pocket. Subsequently, this helps in saving the employer some funds that would have otherwise been used to cater for such a medical expense.
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Advantages and Drawbacks a Consumer Should Know When Enrolling with an HDHP
On merits, HDHPs have lower premiums compared to those remitted for point of service (POS) and Preferred Provider Organization (PPO) insurance plans. Second, people that rarely use their medical covers can save a significant amount of funds. HDHP users have an option of opening an HSA account that never expires and it can help them in settling the out-of-pocket expenses associated with HDHP covers (Cimasi, 2014. p 214; Cohen & Zammitti, 2018. p 5). Lastly, with the HDHP, it is possible for claimants to avoid market rates on covers. That is because the out-of-pocket expenses are the negotiated rates between the insurance company and healthcare providers. On drawbacks, the HDHPs can have high deductibles especially for families, the out-of-pocket expenditure for chronically ill patients is quite high and most minor healthcare expenditures can only be paid out of pocket. That is until a claimant reaches his/her deductible.
Recommending a Friend to Enroll with HDHP
I would recommend a friend or family member to enroll with an HDHP if he/she is not at risk of a terminal illness and if he/she does not seek medical assistance from recognized healthcare institutions often. In the first case, if such a friend/family comes from a family with a history of chronic illnesses, he/she were to get sick with a related condition, the out-of-pocket expenditure to cater for essential healthcare services would be quite high. In the second case, a friend/family member who does not get sick often may save a substantial amount of funds by seeking an HDHP due to its low monthly premiums.
Conclusion
In conclusion, HDHPs are health insurance policies that possess higher deductibles compared to traditional insurance policies. HDHPs are designed to help people who rarely use their health benefits in saving some funds that would otherwise be paid in high monthly insurance premiums. The advantages of using HDHPs include lower premiums, ability to avoid market rate, HSA eligibility option, and ability to save for rare users. The drawbacks of HDHPs include high expenditure on out-of-pocket expenses for chronic illnesses and high deductibles for families.
Bibliography
Cimasi, Robert James. 2014. The Four Pillars of Healthcare Value. New York: John Wiley & Sons.
Cohen, Robin A., and Emily P. Zammitti. 2018. "High-deductible Health Plan Enrollment Among Adults Aged 18–64 With Employment-based Insurance Coverage." NCHS Data Brief 317.
