Which feature distinguishes a high-deductible health plan (HDHP) from traditional plans?

Which feature distinguishes a high-deductible health plan (HDHP) from traditional plans?

• A. Lower deductible than typical plans.
• B. Higher premiums and lower out-of-pocket costs.
• C. Higher deductible, lower premiums, and HSA eligibility.
• D. No network restrictions.

Answer: (C)

The key idea being tested is what sets a high-deductible health plan apart from traditional plans: a high deductible paired with lower monthly costs, plus eligibility for a Health Savings Account. In an HDHP, you pay more out of pocket before insurance kicks in because the deductible is higher. That higher deductible usually comes with lower monthly premiums, since you’re taking on more cost risk up front. The standout feature is that HDHPs qualify you to open and contribute to an HSA, a tax-advantaged account you can use to pay qualified medical expenses and that the funds carry over year to year and belong to you. This combination is what makes the plan distinct from traditional plans, which typically have lower deductibles and higher premiums and are not HSA-eligible. The notion of “no network restrictions” isn’t a defining trait of HDHPs, and the idea of a lower deductible contradicts the core characteristic of HDHPs.

The key idea being tested is what sets a high-deductible health plan apart from traditional plans: a high deductible paired with lower monthly costs, plus eligibility for a Health Savings Account. In an HDHP, you pay more out of pocket before insurance kicks in because the deductible is higher. That higher deductible usually comes with lower monthly premiums, since you’re taking on more cost risk up front. The standout feature is that HDHPs qualify you to open and contribute to an HSA, a tax-advantaged account you can use to pay qualified medical expenses and that the funds carry over year to year and belong to you.

This combination is what makes the plan distinct from traditional plans, which typically have lower deductibles and higher premiums and are not HSA-eligible. The notion of “no network restrictions” isn’t a defining trait of HDHPs, and the idea of a lower deductible contradicts the core characteristic of HDHPs.