An elementary school teacher chose a low-price health insurance plan but soon realized she wasn鈥檛 clear about what it would mean for her family鈥檚 finances.
鈥淥nce I got the insurance card, I compared our old plan to our new plan, and that鈥檚 when I really got worried, because I didn鈥檛 really understand what a deductible was. It got me thinking, how do I use this insurance?鈥�
鈥� Madison Burgess, 31, of San Diego
When enhanced federal subsidies expired at the end of 2025, a lot of people buying their own health insurance on the state and federal exchanges saw their expected monthly rates jump. To keep costs down, many switched to a high-deductible health plan. These plans offer lower monthly payments, but in exchange patients can face steep out-of-pocket costs when they need care.
The plans are pretty common. In 2023, 30% of people who got insurance through their employer had a high-deductible plan, up from only 4% in 2006.
Madison Burgess, a teacher in San Diego, gets health insurance through her teaching job. But when she investigated adding her husband to her plan, it was just 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 overwhelming it felt. Insurance jargon made it hard to tell what her family would owe if her husband got sick.
鈥淚 didn鈥檛 know what a deductible was, so I just went with what was cheap, and now I have regret,鈥� she said.
In exchange for that lower monthly premium payment, her husband鈥檚 coverage won鈥檛 kick in for most care until they鈥檝e paid $5,800 in medical bills. Burgess didn鈥檛 know that the deductible must be met before insurance picks up part of the tab.
Deductible:
The amount you as the patient have to pay before insurance picks up part of the tab
Premium:
The monthly bill for your policy, paid to the insurance company
How do you prepare for thousands of dollars in upfront costs? One option is a health savings account, or HSA, which lets you save pretax money and is now available to people enrolled in lower-tier state and federal exchange plans, including bronze and catastrophic coverage. These plans generally have the lowest premiums on the exchange but the highest out-of-pocket costs when you need care.
Burgess had chosen a bronze plan and didn鈥檛 know HSAs were an option.
鈥淚鈥檝e never thought about having to put money away for a deductible,鈥� she said.
Burgess and others are often more worried about socking away money for unexpected car and house repairs or vet bills.
If, like Burgess, you chose cheaper health coverage for this year only to discover you鈥檙e on the hook for meeting a high deductible, these tips can help you prepare.
1. You might qualify for an HSA and not know it.
If you鈥檙e enrolled in a bronze or catastrophic plan, you qualify to open a health savings account. Think of it as a medical piggy bank with tax perks. You put in pretax money, which lowers your taxable income. The money grows tax-free, and when you spend it on , those transactions are also tax-free. That鈥檚 what people call a 鈥渢riple tax advantage.鈥�
These accounts build 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鈥檛 be used for monthly premiums, but the account is yours to use for qualified medical expenses for yourself, your spouse, or your dependents anytime in the future. 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 tax-advantaged too but are offered only through employers. The money expires annually and you lose any remaining money when you leave that job.
2. HSA-curious? Here鈥檚 how to open one.
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 at any point during the year as long as you鈥檙e covered by an eligible plan. You can choose where to open the account, but be sure to check for any fees financial institutions charge and shop around.
If you get insurance through your job, your employer may require you to use a specific IRS-approved company.
Many people decide they can鈥檛 afford to contribute to an HSA. For some households, the desire to set aside money for medical expenses competes with the need to pay rent and buy groceries.
But there鈥檚 a detail that can make it feel more manageable. Contributions don鈥檛 have to be large. Just a few dollars a month can get you started.
There is, however, a limit. The IRS sets an annual cap on how much you鈥檙e allowed to contribute to an HSA. In 2026, an individual is limited to $4,400, or $8,750 for a family plan. Under that ceiling, the amount is up to you.
3. Preventive services should be covered at no cost to you.
All plans sold on marketplaces must cover at no cost to the patient as long as the care is provided in-network. Those services include routine immunizations and cancer screenings.
Beyond preventive care, understanding what different services cost can help you decide which type of medical appointment works best for your health needs and your wallet. For example, some plans charge less for a telehealth visit than to see your primary care doctor in person.
Check out your for more details.
4. Seek care early in the year.
Most deductibles reset on Jan. 1. Scheduling appointments or surgeries early in the year can be strategic if you discover a condition that requires ongoing care. If you can afford it, meeting your deductible sooner can make the rest of the year significantly cheaper, said Caitlin Donovan, a senior director at the Patient Advocate Foundation.
5. Consider paying cash instead of spending down your deductible.
Some hospitals, clinics, or other providers offer cheaper prices if you pay cash. You have the and explanation of how much a health service would cost if you paid out-of-pocket. Ask for the estimate before you get care. Then, compare that price with what your insurance company tells you it would cost if you used your insurance. If you decide to go with a cash payment, you鈥檒l need to pay while you鈥檙e still at the doctor鈥檚 office, before charges get submitted to your insurance company.
Paying cash may save you money, but the amount you pay generally won鈥檛 count toward your deductible or out-of-pocket maximum.
鈥淚f you don鈥檛 think you鈥檙e ever going to hit your deductible 鈥� you鈥檙e that young invincible, and your deductible is $10,000 鈥� negotiate the cash price,鈥� Donovan said.
6. On an ACA plan? Update your income and use an HSA to avoid a tax surprise.
If you鈥檙e on an ACA plan and you鈥檙e eligible for subsidies, be aware: If your and you don鈥檛 update your marketplace application, you could owe thousands of dollars at tax time. The . Report raises, new jobs, or side gigs as they happen. If your income goes up, stashing money in an HSA can help because the money you put in the account doesn鈥檛 count toward your taxable income.
As soon as you report an increase in your income, that could mean higher premiums (if you no longer qualify for the same subsidy), but experts say it鈥檚 better to pay now than owe a big bill that you have to pay all at once.
鈥淥ne of the biggest problems I see is someone is newly unemployed and they sign up for coverage, they say that they鈥檙e not making any money, and then eventually they get a job and don鈥檛 report it, and then they have this huge tax bill at the end,鈥� Donovan said.
She advises updating your marketplace profile as soon as your income changes, which could newly qualify you for Medicaid or a plan that contributes more toward your medical bills.
Taylor Cook contributed to this report.
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