Thursday, August 20, 2015

DPC Insurance? Maybe, maybe not [UPDATED]

[Scroll down for Update]

One of the "hot new(ish) things" is something called Direct Primary Care (DPC); the "ish" is because we actually blogged on this a few years ago in our interview with Dr Rob Lamberts. But it's gaining increasing traction of late, primarily due to a new (and as-yet unavailable) insurance product that would seem to answer some major objections. More on that in a moment.

First, let's define what DPC is (and isn't):

DPC is often conflated with "concierge" medicine; the major difference between the two models is that concierge is essentially a pre-paid subscription service that promises enhanced access to one's provider. These fees can range from a few hundred to tens of thousands of dollars (a month!). Some concierge providers also accept insurance.

DPC providers also charge a fee (although it is usually much lower than their concierge cousins'), but don't accept insurance; in fact, one of the model's primary goals is to service the uninsured.

One of the immediate problems that one encounters with either model is that, since insurance is not a pre-condition of membership, there seems to be a problem with the ACA tax penalty fine. That is, if one can eschew insurance and still gain provider access, then one is by definition skirting the (Evil) individual mandate.

Or is one?

According to Dave Chase, writing at Forbes, the model is unequivocally empowered by the ACA itself (Section 1301 (a)(3):

(3) TREATMENT OF QUALIFIED DIRECT PRIMARY CARE MEDICALHOME PLANS.—The Secretary of Health and Human Servicesshall permit a qualified health plan to provide coveragethrough a qualified direct primary care medical home plan thatmeets criteria established by the Secretary, so long as thequalified health plan meets all requirements that are otherwiseapplicable and the services covered by the medical homeplan are coordinated with the entity offering the qualifiedhealth plan.
So, seems legit, and an interesting, perhaps even viable alternative to an expensive ObamaPlan, which satisfies the mandate. What's not to love?

Well, the problem with the DPC and concierge models is that they provide for only one provider's care. They don't have any mechanism to pay for one's oncologist or nephrologist, or the ER doc, for that matter. Neither do they pay for the surgeon or anesthesiologist, or the hospital charges themselves. Nor, of course, one's insulin or Lipitor. What to do?

Well, up until now, perhaps, not much: the ObamaTax has effectively killed off the mini-med market, and if one chooses the DPC route then no HSA for you. One could, of course, still purchase an ObamaPlan, but this defeats the purpose of DPC, no? After all, the ObamaPlan already includes first-dollar preventive care, and its own (typically hefty) price tag and additional out-of-pocket exposure. Not to mention, a DPC plan would be subsidy-ineligible. Oops.

Enter Pan-American Life, which recently announced a partnership with MedLion (a sort of DPC co-operative, which seems to have a price transparency problem of its own). Pan-Am has announced a new "wrap around" product that seems to promise an answer to the conundrum named above,  namely: what about non-preventive care?

According to the company's press release:

"Pan-American Life’s U.S. Benefits division will administer a supplemental “wrap” insurance program exclusively for MedLion Direct Primary Care clients."

And that's it. Not exactly long on details, is it?

So, we reached out to Pan-Am, but they were unwilling to share any information about the plan itself. Which is, of course, their call to make, but leaves us a bit doubtful about the product. Plus, such an arrangement means two expenses: the DPC fee plus the "wrap-around" plan (and any additional out-of-pocket exposure that such a plan may also entail).

And there's this: the kind of policy that would be needed to supplement the DPC plan is likely illegal. Which may be why Pan-American is reluctant to share details.

'Tis a bummer.

Which is not to say that the idea lacks merit: we're all for any product (or products) that offers a viable ObamaPlan alternative.

I just don't see this one accomplishing that.


Look, I like the DPC model. It's just very obvious that this is an experiment that should have been tried pre- (or, wishcastingly, post-) ACA. And let's be frank, it was never going to have the kind of impact that its proponents claim: at most, 20% (and more likely less than 10%) of total health care expenditures are PC-related. So reducing PC costs by even substantial amounts (quite uncertain) wasn't going to impact overall expenditures all that much.

UPDATE/CORRECTION: Just spent a very fruitful half hour with Pan-American VP Carlo Mulvenna, who brought me up to speed on how the wrap plan works, and why.

I'll put up a full separate, complete post on the program shortly; suffice it to say, it does what the press release says it will do.

I'd add that it also doesn't do what I mentioned that it wouldn't. Stay tuned.

[Special IB Thanks! to Jason S, David W and co-blogger Patrick]
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