Which phrase best identifies the concept discussed in the material for HDHPs?

• A. High deductible, lower monthly premiums.
• B. Moderate deductible, moderate premiums.
• C. No deductible with full coverage.
• D. Low deductible, high premiums.

Answer: (A)

The concept tested is the trade-off between how much you pay monthly and how much you pay out-of-pocket before coverage kicks in in HDHPs. In a high-deductible health plan, the deductible is set high, so you incur more costs before the plan starts paying, which is balanced by lower monthly premiums. This structure is designed so you save on every-month costs while taking on more responsibility for initial medical expenses, often paired with a Health Savings Account to help cover those costs with tax advantages. The other patterns—moderate or no deductible with full coverage, or low deductible with high premiums—don’t match how HDHPs are designed to function.