Self Directed Health Plan (SDHP)

The Self-Directed Health Plan, or SDHP, is fairly new on the block, having only been around since 2002. Participants are given an allowance – on average, about $1,000 per year or $250 per quarter - from which their health care expenses are taken. Once that allowance has been exhausted, individuals are responsible for the full cost of their care. Money not spent can be rolled over for the following year, similarly to a health reimbursement arrangement (HRA).

As with a preferred provider organization (PPO), the SDHP requests that you pick a primary care physician from their pre-selected network. If you seek out-of-network coverage, you will pay a higher cost.

Request a health plan quote here!

What Do SDHP's Cover?

With a SDHP, you will likely pay low premiums and high deductibles. Some preventative care is covered, generally including physicals, women’s annual examinations, baby check-ups, and immunizations (preventative care coverage varies from plan to plan, so be sure to check carefully). Things such as emergency room visits will only be covered by the plan after you have paid the deductible.

SDHPs are designed to save health care dollars in the area of acute or chronic care. The basic idea is to keep the costs of treating the chronic conditions of a relatively few people from trickling down and resulting in higher premiums across the board.

SDHPs attempt to manage this by offering an “allowance” per procedure based on the average cost of care in a patient’s region. Expenses beyond what the plan determines to be the regional average would be paid out of pocket. The idea behind this is not only to keep costs down across the board, but encourage individuals to make better-researched and cost-effective decisions about their personal care.

Catastrophic health events (transplants, trauma, etc) are handled in a similar fashion: SDHPs contract with health organizations to negotiate what they feel is a fair price for these services and grant you an allowance. The services will be available to you if you use the SDHP’s recommended network. If you choose to go out of the network, you may go beyond your allowance for the procedure.

Top

Is an SDHP Right for You?

If you tend to only visit your doctor for routine and preventative services, you may enjoy the low premiums of a SDHP and the knowledge that your personal costs won’t be affected by other people in the plan. However, if you are a frequent visitor to the emergency room, specialists, or have chronic conditions, you may want to seek another option.

Ask for a self-directed health plan quote!

Top