High-Deductible Health Plan (HDHP)
Updated for plan year 2026
In plain terms
A High-Deductible Health Plan (HDHP) is a plan with a deductible above an IRS-defined minimum and out-of-pocket costs capped below an IRS-defined maximum, both adjusted each year. In exchange for the higher deductible, HDHPs usually carry lower monthly premiums. An HDHP that meets the IRS rules is the only kind of plan that lets you open and contribute to a Health Savings Account. Like all marketplace plans, an HDHP still covers recommended preventive care at no cost before the deductible.
A plain example
You choose an HDHP with a $3,500 deductible and a $300 monthly premium instead of a traditional plan at a $1,200 deductible and $480 a month. You save $180 each month, $2,160 over the year, and route part of it into an HSA. In a healthy year you come out ahead; in a high-care year the bigger deductible is the risk you accepted.
Why it matters
An HDHP is a bet: you take on more upfront risk through the deductible in return for a lower premium and access to an HSA's tax breaks. It tends to favor people who are healthy or who can fund an HSA to cover the deductible, and to disfavor anyone expecting steady, costly care.
A common point of confusion
Not every plan with a high deductible is an HSA-qualified HDHP. Only plans meeting the IRS's specific deductible and out-of-pocket rules qualify, and the marketplace flags which ones do, so enrolling in a merely high-deductible plan won't make you eligible to contribute to an HSA.