What is a High Deductible Health Plan (HDHP)?

What is a High Deductible Health Plan (HDHP)?

• A. High premiums, low deductible.
• B. Low premiums, high deductible.
• C. No deductible.
• D. No premium payments.

Answer: (B)

A High Deductible Health Plan is defined by paying a relatively high deductible before the plan starts sharing costs, while keeping premiums lower than plans with smaller deductibles. This trade-off lowers monthly costs but means you shoulder more of the cost upfront if you need care. HDHPs are often paired with a Health Savings Account (HSA) that lets you contribute pre-tax money to cover the deductible and other qualified expenses, with unused funds rolling over. Therefore, the description of low premiums and high deductible best captures what an HDHP is. The other descriptions describe plans that either charge high premiums with small or no deductible, or imply no premiums at all, which do not characterize HDHPs.

A High Deductible Health Plan is defined by paying a relatively high deductible before the plan starts sharing costs, while keeping premiums lower than plans with smaller deductibles. This trade-off lowers monthly costs but means you shoulder more of the cost upfront if you need care. HDHPs are often paired with a Health Savings Account (HSA) that lets you contribute pre-tax money to cover the deductible and other qualified expenses, with unused funds rolling over. Therefore, the description of low premiums and high deductible best captures what an HDHP is. The other descriptions describe plans that either charge high premiums with small or no deductible, or imply no premiums at all, which do not characterize HDHPs.