Georgia Navigator Practice Exam

What type of deductible does a High Deductible Health Plan (HDHP) usually have?

1. High deductible

2. Low deductible

3. No deductible

4. Variable deductible

The correct answer is: High deductible

A High Deductible Health Plan (HDHP) is characterized by having a high deductible compared to traditional health insurance plans. This means that participants must pay a certain amount out of pocket for healthcare services before the insurance company begins to cover the costs. The intent behind a high deductible is to lower monthly premiums while encouraging individuals to be more cost-conscious regarding their healthcare spending. Typically, to qualify as an HDHP, the deductible must meet specific thresholds set by the federal government, which are updated annually. These high deductibles can lead to lower premium costs, making HDHPs appealing to many consumers who are looking for affordable health insurance options while still having the ability to contribute to Health Savings Accounts (HSAs) for tax-advantaged healthcare spending. In contrast, plans with low or no deductibles, or those with variable deductibles, do not fit the definition of an HDHP, as they do not require participants to pay high out-of-pocket costs before insurance coverage begins.