Which phrase accurately defines an HDHP's financial structure?

• A. Higher monthly premiums with a higher deductible.
• B. High deductible, lower monthly premiums.
• C. Low deductible with low monthly premiums.
• D. No deductible with some copays.

Answer: (B)

High-deductible health plans are built around paying less each month but taking on more upfront costs. The hallmark is a high deductible you must meet before the plan starts sharing most of your medical costs, which is paired with lower monthly premiums compared with traditional plans. After you meet the deductible, you typically pay a portion of costs (coinsurance) until you reach the out-of-pocket limit, at which point the plan pays 100%. This structure also enables a Health Savings Account, allowing pre-tax contributions that can be used for qualified medical expenses and that roll over year to year. The description with a high deductible and low monthly premiums best captures the HDHP setup; other descriptions imply higher premiums, or a lower deductible, or no deductible, which don’t fit how HDHPs work.