Cost Benefits of Direct Primary Care

How does health insurance and CovenantMD work together?  How does Direct Primary Care financially benefit you?  Let's consider the total healthcare costs for a hypothetical family of five in one year.  Let's say this family has an annual family income that is the median for Lancaster County ($64,000), and that they are purchasing their health insurance on the federal exchange.   

Let’s also say that between all members of the family, in the course of their hypothetical year:

- they visit the primary care doctor or pediatrician 5 times
- they visit the ER once for stitches
- they visit Urgent Care once for a sore throat
- someone needs an x-ray
- someone needs an MRI
- someone needs one set of annual bloodwork
- there is one person taking a generic cholesterol medicine, and one person taking a nongeneric depression medicine    

Now let’s look at the total out-of-pocket costs for this family in their year, using three scenarios, each represented by a column below (and each taken from an actual plan on the federal exchange):

Scenario 1: They purchased a “platinum” insurance plan, with high premiums and NO deductible -- the "Platinum" column below
Scenario 2: They purchased a “bronze” insurance plan, with lower premiums and a HIGH deductible -- the "Bronze" column
Scenario 3: They purchased a “bronze” insurance plan and signed up with CovenantMD -- the "Bronze + CovenantMD" column

Here are the numbers:

Platinum
(deductible $0)
Bronze
(deductible $11,000)
Bronze + CovenantMD
(deductible $11,000)
Annual insurance premium $8100 $4400 $4400
CovenantMD annual membership --- --- $1560
Generic cholesterol medicine $72 $468 $24
Non-generic depression medicine $504 $2208 $420
Labwork $0 $0 $30
Five primary care visits $50 $200 $0
One ER visit for stitches $100 $1233 $20
One Urgent Care visit for sore throat $50 $155 $0
One x-ray series $0 $300 $110
One MRI $0 $2600 $580
ANNUAL TOTAL $8,876 $11,564 $7,144

Don't think you'll need an MRI in the near future?  You can substitute any number of other medical expenses into this table, like a mole removal, an ingrown toenail procedure, or a colonoscopy.  Insurance plans vary quite a bit -- you could end up paying a lot more.  For example, a friend recently paid $1800 for stitches in the ER!  And my wife just paid $125 for basic labs at her annual well check!

IN SUMMARY:  The lower-premium, higher-deductible plan by itself is the loser here. But it may become the winner if your family has no or very little medical expenses in a year.  But how often does that happen, especially when it is good to keep up with wellness visits?  The consistent big winner is the lower-premium, higher-deductible plan pared with a Direct Primary Care practice like CovenantMD.  Think of Direct Primary Care as a way of capping your primary care and urgent care costs, or of hedging against using your high deductible.