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An elementary school teacher chose a low-cost health insurance plan, but soon realized she wasn’t clear about what it would mean for her family’s financial situation.
“Once I got the insurance card, I compared my old plan to our new plan, and that’s when I got really concerned, because I didn’t really understand what the deductible was. It made me think, how do I use this insurance?”
-Madison Burgess, 31, of San Diego
When the enhanced federal subsidies expire at the end of 2025, many people who buy their own health insurance on the state and federal exchanges saw their expected monthly rates jump. To keep costs down, many people switched to a high-deductible health plan. These plans offer lower monthly payments, but in return, patients may face steep out-of-pocket costs when they need care.
The plans are very general. In 2023, 30% of people insured through their employer had a high-deductible plan, up from just 4% in 2006.
Madison Burgess, a teacher in San Diego, gets health insurance through her teaching job. But when she looked into adding her husband to her plan, it was too expensive, so she started shopping on the exchange for a cheaper option for him.
The longer she scrolled through the plan options, the more excited she felt. Insurance jargon made it difficult to tell how much her family would owe if her husband became ill.
“I didn’t know what the deductible was, so I took the cheapest one and now I regret it,” he said.
Deductible: The amount you have to pay as a patient before insurance will be part of the tab
Premium: Monthly bill for your policy, paid to the insurance company
In exchange for that lower monthly premium payment, her husband’s coverage would not cover most care until they paid off $5,800 in medical bills. Burgess did not know that the deductible must be met before insurance can pick up part of the tab.
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How do you prepare for thousands of dollars of upfront costs? One option is the Health Savings Account, or HSA, which lets you save money pre-tax and is now available to people enrolled in lower-tier state and federal exchange plans, including bronze and disaster coverage. These plans typically have the lowest premiums on the exchanges but have the highest out-of-pocket costs when you need care.
Burgess had chosen the bronze plan and didn’t know an HSA was an option.
“I never thought about putting money toward a deductible,” he said.
Burgess and others are often more concerned about raising money for unexpected car and home repairs or vet bills.
If, like Burgess, you’ve chosen cheaper health coverage this year and you’ve discovered you’re set to meet a higher deductible, these tips can help you prepare.
Share your questions. Health Care Helplines help you overcome health system barriers between you and good care. Send us your sticky question and we can connect you with a policy expert to help you solve it. share your story. The crowdsourced project is a joint production of NPR and KFF Health News.
1. You may qualify for an HSA and not know it
If you’re enrolled in a bronze or catastrophic plan, you’re probably eligible to open a health savings account. Think of it as a medical piggy bank with tax benefits. You invest money pre-tax, which reduces your taxable income. The money grows tax-free, and when you spend it eligible medical expensesThose transactions are also tax-free. This is what people call “triple tax benefit”.
These accounts create a cushion for future health costs, such as doctor visits, prescriptions and even products like over-the-counter medicine, tampons and sunscreen.
The money typically can’t be used for monthly premiums, but the account is yours to use anytime in the future for qualified medical expenses for yourself, your spouse, or your dependents. The money in the account is yours even if you change jobs or health plans.
An HSA is not the same as a Flexible Spending Account or FSA. FSAs are also tax-advantaged but are only offered through employers. The money expires annually, and you lose the remaining money when you leave that job.
2. HSA-Curious? Here’s how to open it
Una Zenda/KFF Health News
You open a health savings account through a bank or other financial institution. The institution will issue you a debit card so you can make purchases from the HSA.
you can Open an HSA At any time during the year, as long as you are covered under an eligible plan. You can choose where to open an account, but be sure to check and shop around for any fees charged by financial institutions.
If you get insurance through your job, your employer may require you to use a specific IRS-approved company.
Many people decide they are not able to contribute to an HSA. For some families, the desire to set aside money for medical expenses competes with the need to pay rent and buy groceries.
But there is one detail that may make it more manageable. The contribution does not have to be big. You can get started with just a few dollars per month.
However, there is a limit. The IRS sets an annual limit on how much you are allowed to contribute to an HSA. In 2026, the family plan is capped at $4,400, or $8,750 for one person. Under that limit, the amount is up to you.
3. Preventive services should be covered at no cost to you
All plans sold on the Marketplace must be covered some preventive services There will be no cost to the patient as long as care is provided in the network. Those services include routine vaccinations and cancer screenings.
In addition to preventive care, understanding the cost of different services can help you decide what type of medical appointment works best for your health needs and your wallet. For example, some plans charge less for a telehealth visit than for seeing your primary care doctor in person.
check yourself Summary of Benefits For more information.
4. Seek care early in the year
Most deductions reset on January 1. If you are diagnosed with a condition that requires ongoing care, it may be strategic to schedule appointments or surgeries early in the year. If you can afford it, meeting your deductible early can make the rest of the year much cheaper, said Caitlin Donovan, a senior director at the Patient Advocate Foundation.
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5. Consider paying cash instead of reducing your deductible expenses
Some hospitals, clinics or other providers offer cheaper prices if you pay cash. you have right to an itemized estimate And an explanation of how much the health care would cost if you paid out of pocket. Ask about an estimate before seeking care. Then, compare that price to what your insurance company tells you it would cost if you used your insurance. If you decide to pay cash, you will need to pay while you are at the doctor’s office before the fee is submitted to your insurance company.
Paying cash may save you money, but the amount you pay typically won’t count toward your deductible or out-of-pocket maximum.
“If you don’t think you’re ever going to hit your deductible — you’re so young, ageless, and your deductible is $10,000 — then negotiate the cash price,” Donovan said.
Una Zenda/KFF Health News
6. On the ACA plan? Update your income and use an HSA to avoid tax surprises
If you’re on an ACA plan and you’re eligible for a subsidy, be careful: If your earnings change And you don’t update yours market applicationYou may owe thousands of dollars at tax time. easy fix. Reports are the same as raises, new jobs or side gigs. If your income increases, stashing money in an HSA can help because money put into the account doesn’t count toward your taxable income.
As you report an increase in your income, this could mean higher premiums (if you’re no longer eligible for the same subsidies), but experts say it’s better to pay now than to have a bigger bill later that you’ll have to pay all at once.
Una Zenda/KFF Health News
“One of the biggest problems I see is someone is newly unemployed and they sign up for coverage, they say they’re not making any money, and then eventually they get a job and don’t report it, and then they end up with this huge tax bill,” Donovan said.
She recommends updating your Marketplace profile as your income changes, which may make you eligible for Medicaid or a plan that contributes more to your medical bills.
Taylor Cook contributed to this report.
Health Care Helplines help you overcome health system barriers between you and good care. Send us your sticky question and we can connect you with a policy expert to help you solve it. share your story. The crowdsourced project is a joint production of NPR and KFF Health News.
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