NPR published an article reviewing introductory rates on policies offered through state-run insurance exchanges. The report examined 36 different states. So what’s the verdict? A resounding “it depends.” In Oklahoma, premiums are going for as low as $96/month. Meanwhile, in Wisconsin, the lowest rate on a bronze plan is well over $300. The reporter echoed our direct care mantra, saying, “Competition equals lower prices.” They explained how in regions with only one insurance company selling through the subsidized exchange, the average monthly premium for a 21-year-old buying the lowest cost bronze policy is $186, before any subsidies are applied. However, in regions with 10 or more rival carriers, the average cost is $132 or less.
How will Obamacare’s varying premium rates affect direct care practices?
Actually, there are two wins happening. If you’re a doctor looking to move to open a cash-only clinic, you’ll bode well in regions with only one insurance plan offered through the exchange. Lower competition tends towards higher insurance rates, meaning that wrap-around plans and your direct care offering can add tremendous value. Secondly, in areas with fewer insurance plans offered on the exchange, there is another effect: increased premiums for existing subscribers. In this case, because of the lack of competition, and the fact that Obamacare is forcing insurance companies to expand their offerings, rates might reach an exorbitant level for the subscriber. This is another patient who would benefit greatly from switching to a wrap around plan (remember, Obamacare means that insurance plans can’t raise their rates for pre-existing conditions) and enrolling in your direct care clinic.
Are we saying you shouldn’t open a clinic where there is healthy insurance competition?
No. Assuming patients are comfortable with fee-for-service medicine, and find a comfortable premium, it might be harder for them to see the benefits of our direct care model, though. However, for patients who see the virtue in building a relationship with a primary care doctor–people who view primary care as an expected expense, not a surprise, not something to be put off except in drastic situations–these patients can find direct care a perfect complement to a low cost wrap around plan. Supposing Obamacare has a positive effect on insurance rates (lowering them), then there’s no reason your direct care clinic couldn’t thrive, and address the part of the conversation that everyone leaves out of the Obamacare topic — that getting people insured was NOT THE CORE PROBLEM WITH OUR HEALTHCARE SYSTEM. The core problem has been treating the people who do have insurance by doctors who are pressed for time dealing with insurance. Direct care will always have the time advantage over fee-for-service, no matter how low Obamacare theoretically lowers insurance premiums.
In a nutshell, Obamacare is not the bane of direct care. Instead it’s going to have a complex, varying impact. We’ll keep you posted as more research and studies are reported.