high-deductible health plan (HDHP)

What is a high-deductible health plan (HDHP)?

A high-deductible health plan (HDHP) is a type of health insurance coverage with a high deductible that meets specific Internal Revenue Service (IRS) guidelines. To contribute to a tax-advantaged health savings account (HSA), a person must have coverage under an HDHP.¹ HDHPs require policyholders to pay more out-of-pocket expenses before the health plan starts to pay for medical services. To offset these costs, HDHPs can be paired with HSAs, which help enrollees save pre-tax income for medical expenses.

The IRS sets a floor for an HDHP’s deductible; that is, the plan must meet a “minimum deductible” requirement. The plan must also cap out-of-pocket costs at a level set by the IRS each year and may not pay for any non-preventive care before the minimum deductible is met. The impact of each of these requirements are explained in more detail below.

Because of the specific IRS requirements for HDHPs, many plans with high deductibles are not HDHPs. But starting with the 2026 plan year, all Bronze and Catastrophic plans purchased in the health insurance Marketplace will be considered HDHPs, even if they would not otherwise meet the IRS rules for HDHPs.² This will greatly expand the number of HDHPs available to people who purchase their own coverage in the Marketplace.

For example, Dallas has just two HDHPs available in the Marketplace in 2025, but 30 Bronze plans – including the two HDHPs and 28 other plans that aren’t considered HDHPs in 2025. And Phoenix has five HDHPs available in 2025 (four Bronze and one Gold), but a total of 30 Bronze plans available, including 26 that aren’t considered HDHPs.³ In 2026, all of the Bronze plans will be considered HDHPs (along with Catastrophic plans for those who are eligible to purchase them) as a result of the OBBBA.

How do I know if I have a high-deductible health plan?

If your health plan is an HDHP, this will be stated in the policy materials. Many HDHPs have “HSA” or “HDHP” in the plan name, which makes it obvious. But if not, you can ask your employer or health plan for clarification. If you’re shopping in the Marketplace, you can use the filter option so that the results only show available HDHPs.

As noted above, all Bronze and Catastrophic Marketplace plans will be considered HDHPs starting with the 2026 plan year, which means these plans will show up as options if you filter for plans that are HSA-qualified.

Do HDHPs have copays?

For the most part, no. HDHPs usually require  enrollees to cover all of the cost of their non-preventive care before the minimum allowable deductible is met. But there are some exceptions to keep in mind:

• Services offered via telehealth can be covered by a plan (in full or with a copay) before the deductible is met. This provision was made permanent by the “One Big Beautiful Bill” that was enacted in 2025.⁴
• Starting with the 2026 plan year, all Bronze and Catastrophic Marketplace plans will be considered HDHPs. These plans can, and often do, have copays before the deductible. Catastrophic plans are required to cover up to three primary care visits each year, before the deductible (copays can and typically do apply).⁵

Otherwise, HDHPs cannot have copays before the minimum allowable deductible is met. The ACA requires that HDHPs pay for preventive care pre-deductible.⁶ But preventive care is covered in full by all non-grandfathered health plans (plans sold on or after March 23, 2010), which means there’s no copay for preventive services.⁷

After the minimum allowable deductible is met, an HDHP can be designed with any type of cost-sharing until the maximum out-of-pocket is met, as IRS rules do not regulate this. IRS rules for HDHPs do address the minimum deductible, the maximum out of pocket, and the ACA requirement that an HDHP must pay for preventive care before the minimum deductible is met.¹

Copays could be used at this point, but it’s much more common for HDHPs to use coinsurance, or a model in which the deductible is equal to the maximum out-of-pocket, thus eliminating any post-deductible cost-sharing.

How much does a high-deductible health plan cost?

The premium for an HDHP will vary from one plan to another, from one location to another, and how the coverage is obtained – either from an employer or via the Marketplace. Premiums also depend on things like the scope of the provider network, the covered drug list, whether the plan is an HMO or PPO, etc.

HDHPs often have lower premiums than traditional (non-HDHP) health plans that have lower copays and lower overall cost-sharing. But HDHPs do not always have lower premiums than non-HDHPs.

In 2025, HDHPs (obtained from any source) cannot have maximum out-of-pocket (MOOP) limits of more than $8,300,⁸ whereas non-HDHPs can have MOOPs of up to $9,200 in 2025.⁹ So plans with the highest out-of-pocket limits (which tend to have lower premiums if other factors, such as the provider network, are similar) cannot be HDHPs.

But as noted above, that will change starting with the 2026 plan year, for people who buy their coverage in the health insurance Marketplace. At that point, all Bronze and Catastrophic plans (in other words, all of the lowest-priced plans) will be considered HDHPs.

If you’re obtaining an HDHP from your employer, the premium you pay will depend on how much of the premium is subsidized by the employer. The average employer pays the majority of their employees’ premiums for single and family coverage, but this varies from one employer to another.¹⁰

If you’re obtaining an HDHP in the Marketplace, the premium you pay will depend on your household income (an ACA-specific calculation), which dictates your eligibility for a premium subsidy – and if so, the size of the subsidy.

If you pair your HDHP with an HSA and make contributions to the HSA (see below for details about contribution limits), the money you contribute to your HSA will reduce your ACA-specific modified adjusted gross income (MAGI), which determines your eligibility for premium subsidies in the Marketplace. In some cases, selecting an HDHP and contributing to an HSA could result in larger premium subsidies than you'd otherwise receive.

And with the Marketplace subsidy enhancements scheduled to expire at the end of 2025, the ACA’s “subsidy cliff” will return in 2026 (unless Congress takes action to further extend the subsidy enhancements). That means people with household incomes above 400% of the federal poverty level (FPL) will no longer qualify for subsidies at all, regardless of the cost of their coverage. If a contribution to an HSA is enough to bring MAGI to 400% of FPL or lower, it could help the enrollee avoid the subsidy cliff and continue to qualify for a premium subsidy.

A licensed insurance agency or trusted advisor can provide you with more information about your specific situation.

Can I combine a high-deductible health plan with an HSA?

Yes. HDHPs are the only plans that allow an enrollee to contribute to a health savings account (HSA). High-deductible insurance is considered a type of consumer-driven health plan, so you may hear the term CDHP used in conjunction with these plans. The idea is to give patients control over how to spend and invest their money.

Do I have to have an HSA if I have an HDHP?

No, you are not required to open or fund an HSA if you have an HDHP. Some employers that offer HDHPs also provide some HSA funding for their employees who enroll in the HDHP.¹¹ But if you have to fund the HSA yourself, it’s optional to do so. If you have questions about this, you should consult with a tax advisor to understand how funding an HSA might impact your overall financial situation.

The money you contribute to an HSA will reduce your ACA-specific modified adjusted gross income – or MAGI – (which determines your eligibility for premium subsidies in the exchange). As a result, selecting an HDHP and contributing to an HSA could result in larger premium subsidies than you'd otherwise receive.

Are HDHPs available for purchase in the health insurance Marketplace?

Before plan year 2026, the availability of HDHPs in the Marketplace depends on where you live. There are limited HDHP options available in most areas, but some areas have none. For example, if you live in Chicago (zip code 60647), there are no HDHPs available for purchase in the Marketplace for 2025. And in Miami (zip code 33101), only two of the 176 available Marketplace plans are HDHPs. But in southwestern Wyoming (zip code 82901), five of the 30 available Marketplace plans are HDHPs.¹²

As noted above, however, all Marketplace Bronze and Catastrophic plans will be considered HDHPs starting with the 2026 plan year. That change will ensure that multiple HDHPs are available to all Marketplace enrollees.

The number of available Marketplace HDHPs has declined in recent years, as has enrollment in those plans. In 2019, HDHPs accounted for 7% of all plans available through HealthCare.gov, and that had dropped to 3% by 2023. (Most of the remaining HDHPs are offered at the Bronze level.) And while 8% of all HealthCare.gov enrollees selected HDHPs in 2019, that had dropped to 5% by 2022 . ¹³

Are HDHPs offered by employers?

Yes, HDHPs are offered by many employers. In the more than two decades since HDHPs first became available, their utilization by employers has grown. Among employees who have access to employer-sponsored health coverage, half were offered an HDHP option in 2024 (up from 38% in 2015).¹⁴ And a KFF analysis found that more than one out of five people with employer-sponsored coverage were enrolled in HDHPs in 2024.¹⁵

What’s the difference between an HDHP and a PPO?

This is a commonly asked question, but comparing HDHPs and PPOs would be like comparing apples and oranges. HMO, PPO, EPO, and POS are acronyms that describe how a plan is managed, including factors like provider network access and whether a referral is necessary to see a specialist. They have no bearing on coverage details such as deductibles or out-of-pocket costs.

HDHP, on the other hand, is a term that describes a specific type of coverage that conforms to IRS rules regarding deductibles, out-of-pocket limits, and what services can be covered pre-deductible (and starting with the 2026 plan year, the term HDHP will also include all Bronze and Catastrophic Marketplace plans, regardless of their plan design). To be clear, an HDHP will also be either an HMO, PPO, EPO, or POS plan.

What do HDHPs cover?

HDHPs pay for certain preventive care before the deductible – the ACA requires this of all non-grandfathered major medical plans – but under an HDHP, no other services can be paid for by the health plan until the insured has met the deductible (or at least the minimum deductible that applies to HDHPs, explained below).

So HDHPs cannot have copays for office visits or prescriptions before the deductible is met. This is in contrast to a plan that has a high deductible but also offers copays for office visits from the get-go. People might generally consider the latter to be a high-deductible plan, but it’s not an HDHP.

Starting with plan year 2026, these rules will no longer apply to Marketplace Bronze and Catastrophic plans. Those plans will, by definition, be considered HDHPs at that point, regardless of whether they cover any services with copays pre-deductible. But plans at other metal levels, plans sold outside the Marketplace, and employer-sponsored plans will still have to conform to the regular IRS rules for HDHPs in order to allow enrollees to contribute to HSAs.

As described below, there is some flexibility related to pre-deductible coverage of certain chronic conditions. In 2024, the IRS expanded the list of preventive services that can be paid for by an HDHP pre-deductible.¹⁶ And telehealth benefits can be provided pre-deductible  if the plan chooses to offer this.¹⁷

What are HDHP deductible and out-of-pocket rules?

HDHPs have specific guidelines in terms of allowable deductibles and out-of-pocket costs. These are adjusted annually by the IRS, although there have been some years when there were no changes. But these rules do not apply to Bronze and Catastrophic Marketplace plans, which will be considered HDHPs starting with the 2026 plan year.

For 2025 coverage, the minimum HDHP deductibles are $1,650 for individual coverage and $3,300 for family coverage. The maximum allowable out-of-pocket limit is $8,300 for single coverage and $16,600 for family coverage.¹⁸

For 2026 coverage, the minimum HDHP deductibles are $1,700 for individual coverage and $3,400 for family coverage. The maximum allowable out-of-pocket limit is $8,500 for single coverage and $17,000 for family coverage.¹⁹ But again, these are not applicable to Bronze and Catastrophic Marketplace plans.

Note that the IRS also clarifies that if a plan has both an individual deductible and a family deductible (wherein a person who meets the individual deductible does not have to meet the family deductible in order to receive post-deductible coverage), “if either the deductible for the family as a whole or the deductible for an individual family member is less than the minimum annual deductible for family coverage, the plan doesn’t qualify as an HDHP.”²⁰ In other words, a plan with family coverage in 2025 will need to have individual deductibles of at least $3,300 to be an HDHP.

For non-HDHPs, the maximum allowable out-of-pocket limit for a single individual in 2025 is $9,200, and for a family it’s $18,400.²¹ People are often surprised to learn that Bronze and Silver-level HDHPs often have lower out-of-pocket limits than Bronze and Silver-level plans that aren't HDHPs. This is because the allowable out-of-pocket limits for non-HDHPs are higher than the allowable out-of-pocket limits for HDHPs.

But not all plans that fall within the dollar-limit guidelines for deductibles and out-of-pocket maximums are HDHPs, since HDHPs also cannot pay for non-preventive services before the enrollee has met the deductible. So a plan with a $5,000 deductible and $8,000 out-of-pocket maximum would fail to be an HDHP if it also offers $25 copays for office visits before the deductible is met (as opposed to having the enrollee pay the full cost of the office visit and count it toward the deductible). Starting with the 2026 plan year, however, this will no longer be the case for Bronze and Catastrophic Marketplace plans. They will be considered HDHPs regardless of their benefit design.

What are the contribution limits for an HSA?

To help pay these out-of-pocket costs, you can pair your high-deductible plan with a health savings account (HSA).

For 2025 coverage, the HSA contribution limit is $4,300 if your HDHP covers just yourself, and $8,550 if your HDHP also covers at least one other family member.²²  People with HDHP coverage in 2025 have until the April 15, 2026 tax filing deadline to make 2025 contributions to their HSA.

For 2026 coverage, the HSA contribution limits increase to $4,400 and $8,750, respectively.¹⁹

If you’re 55 or older, you can contribute an extra $1,000 a year. This amount is not indexed for inflation. If two spouses are each 55 or older, they can each make the additional $1,000 contribution but only if they each have their own HSA. If they make the family-level contribution to a single HSA (owned by either one of them), they can only make the additional $1,000 contribution for one of them.²³

How has the IRS expanded HDHPs' allowable preventive care coverage?

The IRS issued new guidelines in mid-2019, expanding the list of preventive services that can be paid pre-deductible by an HDHP, with enrollees retaining their HSA eligibility.²⁴ The IRS issued additional new guidelines in late 2024, again expanding the list of preventive services that an HDHP can pay for before the deductible is met.¹⁶

(None of these rules apply to Marketplace Bronze and Catastrophic plans, but those plans will all be considered HDHPs starting with the 2026 plan year.)

The 2019 rules allow – but do not require – certain treatments for certain chronic conditions to be classified as preventive care for HDHP purposes, and thus paid by the plan pre-deductible without the plan losing its HDHP status. The medical conditions and treatments include:

• Congestive heart failure or coronary artery disease: ACE inhibitors and/or beta blockers
• Heart disease: Statins and LDL cholesterol testing
• Hypertension: Blood pressure monitor
• Diabetes: ACE inhibitors, insulin or other glucose-lowering agents, retinopathy screening, glucometer, hemoglobin A1c testing, and statins.(Note that as of 2023, Section 11408 of the Inflation Reduction Act allows HDHPs to pay for insulin pre-deductible regardless of whether the person has been diagnosed with diabetes.)
• Asthma: Inhalers and peak flow meters
• Osteoporosis or osteopenia: Anti-resorptive therapy
• Liver disease or bleeding disorders: International Normalized Ratio (INR) testing
• Depression: Selective Serotonin Reuptake Inhibitors (SSRIs)

The 2024 rule added several items to the list of services that can (but are not required to) be paid pre-deductible by an HDHP. They include:¹⁶

• Over-the-counter oral contraceptives (Opill, approved by the FDA in 2023)
• Male condoms, regardless of whether the HDHP enrollee is male or female
• Continuous glucose monitors
• Insulin “without regard to whether the insulin product is prescribed to treat an individual diagnosed with diabetes or prescribed for the purpose of preventing the exacerbation of diabetes or the development of a secondary condition.”
• Additional breast cancer screening services. (Screening mammograms were already covered, but the new rule allows for pre-deductible coverage of breast MRI and ultrasound.)

In 2024, the Biden administration proposed a rule change that would have required health plans to cover some of these services without cost-sharing.²⁵ But that rule was withdrawn in early 2025, and was never finalized.²⁶ So there is no requirement that any health plans, including HDHPs, pay for the services listed above on a pre-deductible basis. But if an HDHP chooses to do so, the plan will not lose its HDHP status.

Although male condoms can now be paid for pre-deductible by an HDHP, the IRS does not consider male sterilization to be preventive care.¹⁶

Some states have begun mandating pre-deductible male contraceptive coverage, including vasectomy coverage, on all plans. So through the end of 2019, the IRS still considered a plan to be HSA-qualified if it covered male contraception before the deductible. That gave states time to modify their requirements to allow an exemption for HSA-qualified plans, to ensure that the male contraceptive mandates wouldn't cause people to lose the ability to contribute to an HSA.

But since 2020, any plan that pays for vasectomies pre-deductible would fail to be an HDHP, meaning that enrollees would not be eligible to make HSA contributions. (Again with the caveat that Bronze and Catastrophic Marketplace plans will all be considered HDHPs starting with the 2026 plan year, regardless of any pre-deductible benefits they provide.)

How can HSA funds be used?

The money in your HSA is yours to withdraw, tax-free, at any time, to pay for medical expenses that aren’t paid by your high-deductible policy. You can reimburse yourself after the fact if you prefer – so if you incur a medical expense after your HSA is opened but pay for it without withdrawing money from your HSA, you can opt to reimburse yourself for that spending several years down the road.

You just have to keep your receipts and ensure that the medical expense isn't reimbursed by any other entity, or deducted as a medical expense on your tax return. (You can't double-dip on taxes, meaning that if an expense is counted as a tax deduction, it can't also be reimbursed with tax-free HSA funds.)

If you take money out of your HSA for anything other than a qualified medical expense, you’ll pay taxes on the withdrawal, plus a penalty. But once you turn 65, the HSA functions in much the same way as a traditional IRA: you can pull money out for any purpose, paying only income taxes, but no penalty.²⁷

You also have the option to leave the money in the HSA and use it to fund long-term care later in life. The money is never taxed if you’re withdrawing it to pay for qualified medical expenses, even if you’re no longer covered by an HDHP at the time that you make the withdrawals. But contributions to the HSA can only be made while you have in-force coverage under an HDHP.

You must stop contributing to an HSA once you’re enrolled in Medicare (keeping in mind that if you delay your Medicare enrollment, your Part A coverage will be backdated up to six months and you’ll need to make sure you stop contributing  as of the date that your Part A coverage will retroactively begin), but you can continue to use your HSA funds, pre-tax, to pay for your out-of-pocket medical expenses. You can also withdraw tax-free money from your HSA to pay Medicare premiums (for Medicare Part A, if you don't get it for free, and for Medicare Part B and Part D – but not for Medigap plans).

You can also withdraw tax-free money from your HSA to pay long-term care premiums. There are limits, based on age, on how much you can pull out of your HSA to pay long-term care insurance premiums with pre-tax money. The following limits are for 2025).²⁸ (These limits are indexed for inflation each year by the IRS.) If your age is:

• 40 or younger, you can withdraw $480 tax-free to pay long-term care insurance premiums
• 41 to 50, you can withdraw $900
• 51 to 60, you can withdraw $1,800
• 61 to 70, you can withdraw $4,810
• 71 or older, you can withdraw $6,020