Which statement describes an HDHP?

Which statement describes an HDHP?

• A. High premiums and low deductible
• B. No deductible
• C. Low premiums, high deductible
• D. Requires referral for all services

Answer: (C)

HDHPs are defined by higher deductibles paired with lower monthly premiums. The idea is you pay less each month, but you cover more out-of-pocket before the plan pays for most services. This design often also enables eligibility for a Health Savings Account, which lets you save tax-advantaged money to pay for qualifying medical expenses. So the statement that describes an HDHP is low premiums with a high deductible, because that combination is the hallmark of this type of plan. The other descriptions don’t fit: a plan with high premiums and a low deductible costs more monthly and covers sooner, which isn’t characteristic of an HDHP; a plan with no deductible removes the deductible concept entirely and isn’t an HDHP; a requirement for referrals isn’t about the deductible or premium structure and doesn’t define an HDHP.

HDHPs are defined by higher deductibles paired with lower monthly premiums. The idea is you pay less each month, but you cover more out-of-pocket before the plan pays for most services. This design often also enables eligibility for a Health Savings Account, which lets you save tax-advantaged money to pay for qualifying medical expenses. So the statement that describes an HDHP is low premiums with a high deductible, because that combination is the hallmark of this type of plan.

The other descriptions don’t fit: a plan with high premiums and a low deductible costs more monthly and covers sooner, which isn’t characteristic of an HDHP; a plan with no deductible removes the deductible concept entirely and isn’t an HDHP; a requirement for referrals isn’t about the deductible or premium structure and doesn’t define an HDHP.