What does HDHP stand for?

The term HDHP stands for High Deductible Health Plan. This type of health insurance plan is characterized by higher deductibles than traditional insurance plans, which means that the insured must pay a larger amount out of pocket before the insurance company starts covering medical expenses.

High Deductible Health Plans are often linked with Health Savings Accounts (HSAs), allowing individuals to save money tax-free for medical expenses. These plans typically have lower monthly premiums, making them appealing for those who are generally healthy and do not require frequent medical care. Understanding the benefits and structure of HDHPs is essential for managing health-related costs effectively, especially in a landscape where health insurance options can be complex.

Other options provided do not accurately define HDHP, as none of them capture the specific nature of high deductibles and the associated savings strategies that come with such plans.