Tis’ the season. And I’m not talking about the Holidays. It’s open enrollment season. The Pennsylvania insurance exchange opened for sign-ups on Wednesday, Nov 1st. This year, the enrollment season is shorter, ending December 15.
There is quite a dizzying array of new rules, some of which may mean that people may qualify for FREE plans on the exchange, and others may find that silver plans bought OFF the exchange will be less expensive than those ON the exchange. An article attempting to wade through these new regulations recently appeared in LNP.
Here is the point I will make in this blog post: Direct Primary Care (DPC) pairs best with a high-deductible (bronze) plan (and even better with a sharing plan — the subject of another blog post).
What is Direct Primary Care? Briefly, it is an alternative payment arrangement whereby the patient (and not a third party like an insurance company) pays for primary care via a monthly fee. Health insurance is therefore removed from the primary care equation. In this arrangement, patient volume (driven by ever-shrinking reimbursement from insurance companies) is no longer the holy grail of the primary care doctor. DPC allows more time with the doctor, same and next-day appointments, after-hours availability, substantial discounts on medications and lab work, etc. Health insurance is then reserved for those less common, more expensive occurrences — a lot like how we’re used to car insurance working. CovenantMD is a DPC practice that I launched in January 2016. We’ve been growing by leaps and bounds since then, even adding a second doctor (Susan Mellinger, MD) in September.
In this blog post, I would like to compare the total out-of-pocket costs (for a hypothetical family of five in Lancaster Country) between three scenarios:
1) A Gold Plan (in this case, I’ll use Capital Blue Cross' Gold PPO 2000/10/20)
2) A Bronze Plan (in this case, I’ll use Highmark's My Direct Blue EPO 7000B)
3) That same Bronze Plan paired with CovenantMD
I’ll begin with some caveats, then I’ll show you the numbers, and then finally I’ll discuss some takeaways.
THE CAVEATS
It's November, and we're talking about health insurance. So get ready for some very bad news. In most cases (especially for higher earners), health insurance premiums will trump your mortgage or rent payment by a country mile. And then there’s the deductible.
A substantial difference in the plans offered on the Exchange for 2018, compared with 2017, is that there are no copayments or coinsurance for primary care, urgent care, or ER visits (or really most costs) prior to the deductible being met. That means that we'll be paying the full price of office visits until we meet the deductible (though "preventive care visits" are still "free"). That is now true for ALL TEN PLANS (Bronze, Silver, and Gold)! If I needed one fact to shine the light on the advantages of Direct Primary Care over usual, insurance-based care, this is certainly the one, as there are no copays for visits in DPC.
The health insurance season is one fraught with many emotions, most of them negative. But if I could offer one word of encouragement, it would be to remember that health insurance is not healthcare. In other words, health insurance is only one of many ways to pay for healthcare. One of those ways is right out of your own pocket. Reserving health insurance for those less common, more expensive occurrences, and paying out-of-pocket for the less-expensive, common stuff, is a surefire way to save on healthcare costs.
THE NUMBERS
The numbers that I’m about to share reflect costs of a family of five in Lancaster County for a somewhat busy (but certainly not catastrophic) healthcare year. The premium prices I list here are unsubsidized. In other words, depending on income, your premium costs may be a lot less, but they will be a lot less by the same amount in all three columns, so the cost differences I illustrate still apply.
If the family chooses the Gold plan, they meet their deductible, and all costs reflect this. If the family chooses the Bronze plan, they do not meet their deductible. The deductible does not apply to generic medications for the Gold plan, but it does with the Bronze plan, hence the difference in cost for the generic blood pressure medicine.
I assumed (generously I think) that all five primary care office visits that this family had were for preventive care, meaning that there is no out-of-pocket cost for these visits (but more often than not, people are shocked by how "not free" these visits actually are, after you add in labs, medications, and whether or not you brought up another complaint that can be billed as a non-preventive visit). But any visits for routine follow-up (like for high blood pressure) or for acute issues (like an ear infection) would cost the full amount (typically $150 per visit).
Here are the numbers:
SOME TAKEAWAYS
You can save money on premiums by risking a higher deductible, as in the case of a Bronze plan. But the risk, as illustrated here, is that costs may skyrocket if you use healthcare. One significant difference between the chart above, and the one the one I posted from last year, is that the Bronze plan comes out costing less out-of-pocket than the Gold plan. In other words, the difference in premiums between Gold and Bronze now exceed the deductible of the Bronze plan. So for this hypothetical family, it just doesn’t pay to purchase the Gold plan, even if they expect to be high utilizers of healthcare.
Now to the main point: Direct Primary Care can save you substantially on your out-of-pocket costs. Look at the third column. Many of our amenities help to hedge against digging into your deductible: no copays for visits, substantial discounts on labwork, and on medications, and after hours availability (with just a $50 fee for urgent or emergent visits on evenings, holidays, and weekends). And you get a much better patient/doctor relationship to boot, a relationship that is not influenced by the hurried treadmill and long waits of busy insurance-based primary care practices.
Interested in finding out more about Direct Primary Care and CovenantMD? Visit our website, give us a call (717-287-1983), or consider setting up a free information session.
Patrick Rohal, MD, FAAFP is a family doctor and the founder of CovenantMD, a Direct Primary Care Practice in Lancaster, PA. He lives in Landisville with his wife Lynn, and three kids that spent an evening last week as Elsa, Little Red Riding Hood, and Ironman.