SDHP Plans in Michigan
A SDHP is a category of health insurance that combines features of a PPO plan and a self-directed account. Fundamentally, it is a kind of PPO that has a high deductible in order to keep the monthly premiums low. In order for the insured to also receive coverage for preventive care costs that total less than the deductible, he has a savings account that he pays into at regular intervals.
In a SDHP plan, the patient is encouraged to use in-network or preferred providers. He may also need to choose a primary-care physician in the network. Expenses are lowered through the discounts available within the network. However, the insured must pay all costs up front until the deductible is met, and must pay a percentage of costs afterwards.
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Advantages of a Self-Directed Health Plan:
- Insured patients who rarely go to the doctor except for preventive care can save in lowered premiums.
- Preventive care expenses can be covered out of the savings deposits.
- The cost of the lower premiums and the savings deposits are less than the higher premiums in other plans.
- Using the preferred provider list and choosing a primary care physician can substantially lower costs
- The savings or allowance left over from each quarter may be rolled over to the next quarter.
Disadvantages of a Self-Directed Health Plan:
- Out-of-pocket costs are very high because of the high deductible. Coverage from the plan does not begin until you have paid for care up to the deductible amount. If you have a serious illness or accident before you have had the chance to save an amount equal to the deductible, this type of plan could be extremely expensive for you.
- You will need to pay out-of-pocket the expenses in the range between the preventive care allowance and the deductible amount.
- You will pay more for care unless you choose an in-network doctor.
- Pre-certification is required of all hospitalizations and most elective treatments
Self-Directed Health Plan (SDHP) Details
The focus of a SDHP is to lower expenses by having low premiums with a high deductible and by emphasizing preventive care. Young, healthy people who don’t often get sick would be able to take advantage of this plan. They would have the flexibility to manage the wellness care they need. They also would be in a position to accumulate a sizable amount in their accounts over time if they did not need care. It might not be the best choice for families with young children, who need frequent doctor visits.
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