High deductible health insurance

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High deductible health insurance is a type of insurance where the premium is kept low by having a high deductible or amount you must pay before the insurance company has to start paying. For example, a high deductible insurance policy might have a deductible of $3,000, which means you must pay for the first $3,000 in the policy year from your own pocket. After that the insurance policy starts paying their portion of the bill.

For healthy people, the lower premiums make high deductible insurance an attractive option. It allows you to put the savings from the lower premiums into a savings account where it can be used for paying the deductible if necessary.

High deductible insurance can also be paired with a health savings account. A health savings account is similar to an IRA in that its contribution is a pretax expense. Unlike an IRA it can be used to pay for most health care expense. If there is money left over at retirement, it can be taken out just like a traditional IRA.