Explain the term 'High-Deductible Health Plan' (HDHP).

A High-Deductible Health Plan (HDHP) is characterized by having higher deductibles that must be met before the insurance coverage begins to pay for most health care expenses. This means that the insured individual is responsible for a larger portion of their medical costs out-of-pocket before the insurer starts to contribute. HDHPs often have lower premiums compared to other health insurance plans, enabling consumers to save money on their monthly payments while still maintaining coverage for healthcare needs.

Typically, HDHPs are designed to encourage consumers to be more cost-conscious about healthcare spending, as they will need to pay more out-of-pocket before their plan begins to cover expenses. Additionally, these plans are often coupled with Health Savings Accounts (HSAs), allowing individuals to save pre-tax dollars to help cover their higher out-of-pocket expenses. By understanding the structure of an HDHP, individuals can make informed decisions about their health insurance options based on their financial and healthcare needs.