What best describes a high-deductible health plan?

• A. Lower premiums with higher out-of-pocket costs before coverage begins.
• B. Lower premiums but higher out-of-pocket costs before coverage begins.
• C. Higher premiums with no deductible.
• D. Premiums do not change with deductible.

Answer: (A)

High-deductible health plans feature lower monthly premiums but require a higher out-of-pocket amount before the plan starts paying. This means you’ll save on monthly costs, but you’ll face larger expenses up front until you meet the deductible. After meeting the deductible, you typically pay coinsurance until you reach the out-of-pocket maximum, at which point the plan covers most or all further covered services. HDHPs are often paired with Health Savings Accounts, which let you save tax-advantaged funds for medical expenses, with any unused money rolling over year to year. The key idea is the trade-off: less to pay each month, but more to pay when you need care upfront.