Choosing a cheap health plan can cost more than you think — if you don’t know about the HSA

Choosing a cheap health plan can cost more than you think — if you don’t know about the HSA.

Madison Burgess, a 31-year-old teacher in San Diego, picked a low-cost bronze plan for her husband on the health insurance exchange, only to realize she didn’t understand what a $5,800 deductible meant. Her plan won’t cover most medical expenses until her family pays that full amount out of pocket.

She’s not alone. When enhanced federal subsidies expired at the end of 2025, many people shifted to high-deductible health plans to keep monthly premiums low. What they often don’t realize is that those savings come with steep upfront costs when care is needed.

Bronze and catastrophic plans — the cheapest on the marketplace — now qualify enrollees for a health savings account. That account is a rare financial tool: it offers a triple tax advantage. Contributions are pretax, the money grows tax-free, and withdrawals for qualified medical expenses are tax-free.

For 2026, the IRS allows up to $4,400 in individual HSA contributions, or $8,750 for families. The amount you contribute is up to you — even a few dollars a month builds a buffer.

Burgess didn’t know she could open an HSA. She also didn’t know that preventive services like cancer screenings and immunizations are covered at no cost, as long as they’re in-network. Nor did she know that paying cash for certain services might be cheaper than using insurance — though those payments don’t count toward the deductible.

There’s another trap: failing to report income changes on ACA applications. If your income rises and you don’t update your marketplace profile, you could owe thousands in taxes. But HSA contributions reduce your taxable income — which can help offset higher premiums or tax bills.

If you’re on a high-deductible plan and didn’t know about the HSA, the cost of that ignorance isn’t just financial. It’s the difference between planning for care — and being blindsided by it.