What is the primary purpose of High-Deductible Health Plans (HDHPs)?

The primary purpose of High-Deductible Health Plans (HDHPs) is to increase employees' financial stake in their own healthcare. These types of insurance plans typically come with higher deductibles that must be met before the insurance begins to pay for most services. By having higher deductibles, HDHPs encourage individuals to think more critically about their healthcare spending. They are likely to consider the costs of medical services more carefully, which can lead to more judicious use of healthcare resources.

Moreover, HDHPs often work in conjunction with Health Savings Accounts (HSAs), which allow employees to save money tax-free for medical expenses, further deepening their engagement in their own healthcare financial decisions. This model aims to promote more cost-effective behaviors and greater awareness among consumers regarding their healthcare choices.

Understanding this key aspect of HDHPs helps demonstrate their role in the broader landscape of healthcare financing, focusing on consumer responsibility and cost management.