Which health plan has a low cost but high deductible?

The health plan that is characterized by low costs but a high deductible is the High Deductible Health Plan (HDHP). HDHPs are designed to have lower monthly premium payments compared to other types of health insurance plans, making them an attractive option for individuals looking to save on upfront healthcare costs. However, they come with higher deductibles, meaning that the insured individual must pay a larger amount out-of-pocket for medical expenses before insurance coverage takes effect. This structure can incentivize individuals to seek necessary medical care carefully and to be more aware of healthcare costs.

HDHPs are often paired with Health Savings Accounts (HSAs), which allow individuals to save money tax-free for medical expenses. This combination makes them appealing for those who are relatively healthy and do not anticipate needing extensive medical care, thus allowing for potentially significant savings in both monthly premiums and tax benefits.