Which characteristic does a High Deductible Health Plan (HDHP) typically have?

A High Deductible Health Plan (HDHP) is specifically designed to have a higher annual deductible compared to traditional health insurance plans. This means that the insured must pay more out-of-pocket for healthcare expenses before their insurance coverage kicks in. The purpose of an HDHP is to encourage consumers to make more cost-conscious healthcare decisions, as they will be directly responsible for a larger portion of their healthcare costs until they meet the deductible.

In addition to the higher deductible, HDHPs often are paired with Health Savings Accounts (HSAs), allowing individuals to save money tax-free to pay for qualified medical expenses. While this plan can lead to lower premium costs, the key characteristic that defines an HDHP is the elevated deductible that participants must meet before receiving benefits from their insurance provider.

Other options, such as lower deductibles or having no deductible at all, do not align with the definition or structure of an HDHP. Similarly, limiting deductibles strictly to preventive services is not a feature of HDHPs. Therefore, the defining characteristic of an HDHP being a higher annual deductible is crucial for understanding how these plans operate.