What is a high-deductible health plan (HDHP)?

A high-deductible health plan (HDHP) is characterized by having higher deductibles than traditional insurance plans and lower premium costs. This structure is designed to make the insurance more affordable in terms of monthly payments while shifting more initial costs onto the insured individual through the deductible.

One of the key aspects of an HDHP is that it qualifies individuals to open Health Savings Accounts (HSAs). HSAs allow individuals to save money on a tax-advantaged basis to pay for qualified medical expenses. The combination of an HDHP with an HSA can significantly benefit policyholders by encouraging them to save for healthcare needs while also allowing them to take advantage of lower premiums.

The other choices describe different scenarios that do not align with the HDHP framework. For example, a plan that only covers emergency services and preventative care does not encompass the broader range of coverage typically associated with an HDHP. Similarly, a type of insurance that does not require any deductibles contradicts the very definition of what makes a high-deductible plan distinctive. Finally, a plan that offers unlimited coverage for all medical services does not align with the cost-sharing structure and risk management principles inherent in high-deductible plans. Thus, option A effectively captures the essence of HDHPs