How does a high-deductible health plan typically function?

A high-deductible health plan (HDHP) is characterized by having higher out-of-pocket costs compared to other types of insurance plans, requiring individuals to pay more in deductibles before the insurance coverage begins to cover costs. This structure encourages individuals to be more mindful of healthcare spending, as they must first meet a certain threshold in expenses before the plan begins to contribute to medical costs.

In this context, the statement about higher out-of-pocket costs accurately describes how an HDHP functions. Typically, once the deductible is met, the plan will cover a larger portion of medical expenses, but until that point, the insured person is responsible for paying the full costs of their healthcare. This model is designed to promote cost-sharing and can be beneficial for those who anticipate low healthcare needs, allowing the insured to save on monthly premiums while being prepared to handle higher costs when necessary.

The other options do not effectively capture the essence of how an HDHP operates. Comprehensive coverage irrespective of the deductible does not accurately reflect the cost-sharing mechanism of an HDHP. While preventive care services are covered, this is not the exclusive function of an HDHP. Additionally, the assertion that there is no payment from the insured at the time of service contradicts the high out-of-pocket