Which plan is known as a 401 (K) plan for health care?

The correct answer is the consumer-directed health plan, which is often likened to a 401(k) in the context of health care because it emphasizes individual control over health care spending and decision-making. Much like how a 401(k) retirement savings plan allows employees to save and invest for retirement, a consumer-directed health plan allows individuals to manage their health care finances through health savings accounts (HSAs) or similar vehicles.

These plans typically offer higher deductibles in exchange for lower premiums, encouraging consumers to make thoughtful health care decisions using the funds available in their health accounts. This concept aligns with the broader idea of empowering individuals to take charge of their health care costs, similar to an employee managing their retirement savings.

Other types of health insurance plans, like traditional health insurance, Health Maintenance Organizations (HMOs), and Preferred Provider Organizations (PPOs), adopt more structured management of health care services and costs, often having less flexibility for individual spending and decision-making compared to consumer-directed health plans.