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

A high-deductible health plan (HDHP) is primarily characterized by having high deductibles paired with lower premiums. This means that the insured individual is responsible for paying a significant amount out-of-pocket before their insurance coverage kicks in, which is the essence of the term "high-deductible." The trade-off for this higher deductible is that the monthly premiums are generally lower than those of standard health plans. This structure allows consumers to save on monthly costs but requires them to bear more risk by covering a larger portion of their medical expenses upfront, making it ideal for individuals who are generally healthy and do not expect to access extensive medical care.

When looking at the other options, they do not accurately describe the key features of an HDHP. For instance, a plan with low out-of-pocket costs and high premiums would correlate with a different type of insurance model where less risk is borne by the insured, but this is not the case with HDHPs. Similarly, options that describe plans covering only catastrophic events or having no deductibles at all do not align with the HDHP concept, which is specifically defined by a structure that balances high deductibles with lower premiums, enabling a unique model for managing healthcare costs.