Why you should (probably) have an HDHP

If you're young (20s especially, 30s maybe) and relatively healthy (i.e. you only use your health insurance for annual exams and maybe 1-2 low-cost prescriptions per month), you probably should have a high deductible health plan (HDHP) with an HSA.

Here's what that means:

1. An HDHP, as the name implies, has a high deductible (usually $3000 or more per year). Your deductible is the amount that you pay at the doctor's office for healthcare before your insurance kicks in. If you only use your insurance for preventive healthcare (check-ups), it means you never touch your deductible, because preventive care is generally free to you as part of your insurance.

2. An HSA (health savings account) is a bank account-like vehicle that you contribute to to cover health-related expenses. The money that you put in an HSA is pre-tax (meaning that the money comes out of your paycheck before you pay taxes on your income), which means you pay less in taxes. E.g. let's say your paycheck is $1000 per pay period and you pay 15% in taxes (so you get $850 in your bank account each paycheck). If you decide to contribute $100 to an HSA, that comes out first and goes into your HSA account, and then you pay 15% tax on $900 (so you get $765 in your bank account each paycheck). So you've put aside $100 for health stuff, but you only "lose" $85 from your paycheck! Because of this, there's a limit to what you can contribute to it per year (this changes each year, currently it's about $3850 for a single person).

3. Money that you put into an HSA is yours to use for any health-related expense, forever. This includes: buying medicine at a pharmacy, dental expenses, eye exams, glasses or contacts. [It does not, however, include gym memberships, sadly.] So if you go to the dentist for a root canal, and it costs $500, your dental insurance pays $300, you can use your HSA to pay the rest, even though the account is part of your health insurance and not your dental insurance.

4. Many HSA accounts have an investment option, meaning that your money could earn more money while you're not using it, increasing the amount of money that you have for health-related expenses later in life. Those gains (money earned from investments) are not taxed either. The only time you pay taxes on HSA money is if you withdraw money for a non-health-related expense, then you have to pay a penalty.

5. Your premium (the amount that you, yourself pay for insurance, usually deducted from your paycheck directly) is significantly lower with an HDHP than a "regular" insurance plan (HMO/PPO/etc), because you're taking on the cost of funding your HSA, which again, means less money coming out of your paycheck. Sometimes, your employer may also contribute to your HSA to help manage this difference.

Here's where the biggest advantage is. If you contribute the max to your HSA annually, but you never really use it (because you're young and healthy), when you're older and have health complications (and this includes giving birth to a child), you already have money put away and you don't have to worry about how you'll pay the $30000 it costs to give birth without complications in the US (yes, this is really the current average cost of childbirth). This is a great thing to build up now so that at the very least, you have a healthcare safety net for when shit goes sideways. Also, if you decide to switch to a different health plan that's not HSA eligible, you still have that money and you can continue to use it, you just can't put more money into the HSA account.