Friday, August 21, 2015

DPC Insurance, "The Wrap"

As promised in the Update to our previous Direct Primary Care (DPC) post, we have details about Pan-American Life's "wrap" plan.

Pan-American VP Carlo Mulvenna was kind enough to walk me through the basic idea behind the plan's design, as well as share product details. In a nutshell, the carrier has staked out a niche in what Carlo calls the "limited benefit space," and focuses its efforts there. They were approached by the folks at MedLion (the DPC bundler) because there was a perceived need for at least some non-primary care coverage.

The folks at Pan-American basically took their off-the-shelf limited benefit plan and carved out the primary care pieces (which would be redundant in this application). This gives insureds access to specialists and lab work via reimbursement (there are prescription med options available, as well). Because the plan is built on a "hospital indemnity chassis," it's approved as an "excepted benefit" and thus exempted from major pieces of the ACA. The whole program is designed to meet the ACA individual mandate requirement.

Both the MedLion and Pan-American programs are offered as employer-sponsored arrangements, not (currently) available to individuals ("retail"). The wrap plan is guaranteed issue and imposes no pre-existing condition exclusions; it does require a minimum enrollment of 50 employees.

Carlo told me that he understood that MedLion's DPC fee runs about $85 a month per adult; coupled with a typical "wrap" plan the total cost comes to about $180 per member, per month.

I still have reservations about this: as Carlo conceded, there is no provision for catastrophic claims. I know that DPC proponents tend to focus on how good primary care can help prevent a lot of major claims. And that's a legitimate point, but entirely irrelevant to the discussion of insurance:

I don't think anyone disputes that primary care is important; the issue is why the heck it should be covered by insurance. As one who looks at these things through the lens of risk management, I can't help but think of the old saw about "penny wise, pound foolish." So taking it out of the insurance realm, as DPC does, is a positive step. And I grant that Pan-American's wrap program is indeed better than nothing, especially to folks at the lower end of the income spectrum. But when we're talking about nearly $200 a month per adult, then I'm just not seeing the value when a cancer or heart attack or kidney failure can quickly wipe out any possible savings.

Color me unconvinced.

[Special IB Thanks to PALIG's Carlo Mulvenna for his time and insights]
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