Which plan is designed to reduce premium costs by requiring a higher deductible before benefits start?

• A. HDHP
• B. POS
• C. PPO
• D. EPO

Answer: (A)

A High-Deductible Health Plan is designed to lower monthly premiums by shifting more upfront costs to the member. It requires a higher annual deductible before most benefits begin, so you pay more out of pocket before coverage starts. After meeting that deductible, you typically pay coinsurance or copays and then ride within an out-of-pocket maximum that caps your total spending for the year. This arrangement reduces the insurer’s outlay and, in turn, lowers the premium you pay each month. It’s often paired with a Health Savings Account to help cover the deductible and other qualified expenses.

Other plans don’t center on a high deductible as the way to reduce premiums. They focus more on network structure and flexibility (managed care within a broader or narrower provider network) and may come with different cost-sharing patterns that don’t inherently involve paying a much higher deductible to achieve lower premiums.