High Deductible Health Plan (HDHP) Law and Legal Definition

A high deductible health plan (HDHP) is a health insurance plan with lower premiums and a very high annual deductible. It covers medical expenses above the normal parameters of basic health insurance than a traditional health plan. HDHP is always used in the context of health savings accounts (HSA). An HDHP requires an insurance holder to pay the first portion of a medical expense before an insurance company starts to pay medical expenses. The premiums under HDHP are lower than the premiums for traditional fee-for-service, participating provider organization (PPO), and health maintenance organization (HMO) plan. It is a form of catastrophic coverage, hence it is also called as catastrophic health insurance.