Georgia Navigator Practice Exam

Which of the following describes a High Deductible Health Plan (HDHP)?

1. An insurance plan with a low monthly premium and no deductible

2. A health plan with a high deductible combined with a funding option for out-of-pocket expenses

3. A plan that does not require any out-of-pocket expenses

4. A plan that only covers preventive care services

The correct answer is: A health plan with a high deductible combined with a funding option for out-of-pocket expenses

A High Deductible Health Plan (HDHP) is characterized by a higher deductible compared to traditional health insurance plans, meaning that individuals must pay a larger amount out-of-pocket before their insurance starts to cover costs. However, HDHPs often include a funding option, such as a Health Savings Account (HSA), which allows individuals to save money tax-free to pay for their medical expenses. This structure helps encourage consumers to be more mindful of their healthcare spending since they are responsible for more up-front costs. This choice accurately reflects the essence of an HDHP, as it combines the concept of having a high deductible with a mechanism to help manage out-of-pocket expenses. In contrast, the other options do not align with the definition of an HDHP. For instance, a low monthly premium with no deductible does not encapsulate the HDHP model, nor does the notion of a plan that mandates no out-of-pocket costs. Additionally, limiting coverage to only preventive care does not represent the broader coverage that HDHPs can provide, as they typically cover a range of services once the deductible is met. Thus, option B effectively contextualizes the features associated with a High Deductible Health Plan.