Self-Directed Health Plans

By Compuquotes Team on April 3rd, 2008
Health Insurance

Self-Directed Health Plans (SDHPs) are, as their name suggests, one of the most flexible health insurance options available. SDHPs combine aspects of Health Savings Accounts and PPO plans, and provide users with the option to choose any healthcare provider whether in or out of the managed care network.

  • The Basics of SDHPs

The owner of an SDHP has access to a personal savings account containing funds that are intended to cover healthcare costs. However, the owner of the plan does not have to make any contributions to the account (of course, they may make contributions if they wish). Instead, the principal contributor is the insurer.

Every three months, the account is replenished with approximately $250 (for individuals) or $500 (for families), that can be used for any preventative healthcare visits that are covered by the plan. Money that isn't used in each quarter can roll over to the next, and money that isn't used during a single year can also be rolled over to subsequent years.

The much greater focus on preventative healthcare is another way in which SDHPs differ from traditional managed healthcare plans. SDHPs have relatively low monthly premiums, but have a high deductible. However, preventative healthcare visits do not require either a deductible payment or a co-payment. Any visits that are non-preventative incur a co-payment, and the deductible for non-preventative visits must be paid each year before subsequent visits are covered (note that the deductible does not roll over).

SDHPs also include access to a preferred provider network of healthcare professionals. Visiting network providers is complexly optional and policy owners do not need a referral to visit a specialist; however visiting non-network doctors and specialists will involve a co-payment.

  • What does an SDHP Cover?

Most SDHPs covers the following types of preventative healthcare:

  • Consultations, routine physical exams and regular check-ups
  • Pre-natal care for pregnant women, and post-natal care for mother and child
  • Mammograms and cervical screening for women
  • Immunizations
  • Home visits
  • Diagnostic or screening tests such as x-rays
  • Some SDHPs also include prescription coverage

In-patient hospital services (such as surgery) and emergency health care are not included in the preventative portion of the plan. For any medical expenses other than those for preventative healthcare, the deductible must be paid before insurance provides coverage.
Who is a Self-Directed Health Plan Suitable For?

SDHPs are best suited to individuals and families whose ongoing healthcare costs are low, and include mainly the costs of preventative care such as routine physical exams and yearly check-ups. People who are generally healthy can minimize their healthcare expenses to a very low level with this type of plan.

One of the advantages of an SDHP is that unused funds carry over yearly as well as quarterly. Unused money can accumulate year after year, and can be used for those rare occasions when more expensive health care is needed.

These plans are typically not suitable for any individual with a chronic health condition, such as diabetes. Chronic illnesses tend to require frequent doctor's visits and other care, and these do not qualify as preventative healthcare.

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