Medical Expense✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
Which statement correctly describes a high-deductible health plan (HDHP)?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
An HDHP is a plan with a higher-than-typical annual deductible and correspondingly lower premiums, because the insured assumes more first-dollar cost before the plan's benefits begin. To be HSA-qualified, the HDHP must meet federal minimum-deductible and maximum-out-of-pocket requirements, and the individual must not be otherwise covered by a disqualifying plan. HDHPs are offered in both the individual and group markets and are not limited to large employers, making them a core consumer-directed health plan element in the medical expense objectives.
Why the other options are wrong
- B) The defining feature is a high deductible; coinsurance applies after the deductible, and no standard HDHP eliminates the deductible entirely.
- C) HDHPs are widely offered in the individual market and by employers of all sizes, not only groups of 500 or more employees.
- D) Under an HDHP, the deductible applies to nearly all covered services before cost-sharing begins, including drugs and office visits.
Memory hook
HDHP = a big first-aid bill before the plan opens its wallet; the trade-off is a smaller monthly premium.