Direct care plans could alleviate problem of high deductible plans — if Congress would fix the law

Direct care plans could alleviate problem of high deductible plans — if Congress would fix the law
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Often, the most effective way to make a point is to tell a story. And that’s what NPR does in its new report on high-deductible health policies (HDHPs) that are keeping too many Americans out of their doctors’ offices. 

Susan, who carries a gene that makes her predisposed to breast cancer, has one of those policies. The deductible of $6,000 meant that when she got her first MRI and a mammogram to screen for breast cancer, she paid $3,800 out of her own pocket. It cost so much in 2017 that she was forced to delay her screening in 2018.

She’s not alone; a new study shows that many American women are forced by high deductibles to delay detection and treatment of breast cancer. These aren’t women who are uninsured; they’re women who have health insurance policies fully compliant with the Affordable Care Act.

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“Low-income women in HDHPs experienced relative delays of 1.6 months to first breast imaging, 2.7 months to first biopsy, 6.6 months to incident early-stage breast cancer diagnosis, and 8.7 months to first chemotherapy,” the study reports. “High-income HDHP members had shorter delays that did not differ significantly from those of their low-income counterparts.”

Those lost weeks and months can be crucial. And that applies to many other conditions. Physicians have story after story of people who need preventative care or ongoing monitoring who simply don’t come into their offices because of high deductibles.

Yet more and more Americans are on HDHPs.

“Nearly 70 percent of mid to large employers offer HDHPs to employees and for 13 percent, an HDHP is the only option offered,” Health Affairs reports. “In 2011, roughly a quarter of Americans between the ages of 18 and 64 had HDHPs as their primary insurance either through an employer or individually purchased. In 2016, that share had grown to 39.3 percent.”

As a result, many are putting off those important visits to their primary care physicians. According to the Health Care Cost Institute, “Office visits to primary care physicians (PCPs) declined 18 percent from 2012 to 2016 for adults under 65 years old with employer-sponsored health insurance.”

The plain truth is that an insurance card in your wallet is less meaningful when coupled with a $5,000 deductible and a 20 percent co-insurance obligation. The problem is especially acute for those with chronic and pre-existing conditions — the very people the Affordable Care Act was supposed to help.  They may have coverage for those conditions, but if doctor visits are cost-prohibitive, they don’t have care.

Health savings accounts (HSAs) are meant to help bridge this gap. HSAs are accounts that use pre-tax dollars for qualified medical expenses, when coupled with HDHPs. Yet HSAs “are not sufficient to resolve the problem alone,” as Health Affairs points out.

But there’s a better solution — Direct primary care. Direct primary care is an affordable primary healthcare model based on a monthly membership with a particular doctor or group. Once that membership is paid, the family sees that doctor for their primary care. Direct care doctors accept no insurance and opt out of all third-party relationships.

These are allowed under the ACA as what it refers to as a “medical home.” A provision of the ACA, Section 1301 (a) (3), would allow direct primary care medical homes to be offered in state marketplaces in combination with qualified health plans.

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How does it work? I’m an example. I have a high-deductible health plan, but I also utilize a membership with my direct primary care physician in my area for my family’s primary care needs. I have a relationship with my doctor that I value for the very real health benefits it incurs — the kind of relationship President Obama promised all of us when he (falsely) said, “if you like your doctor, you can keep your doctor.”

I also have an HSA funded by my employer, and I’d like to use those dollars to pay my membership. The IRS, however, does not recognize my relationship with the doctor as a qualified medical expense but rather as a second plan.

Congress can fix this. To do so, it would have to instruct the IRS that direct primary care is not a second health care plan. Under ACA rules, only individuals with a HDHP are eligible to have an HSA; the presence of a second plan (in this case membership in a direct primary care system) would invalidate a family’s eligibility.

The U.S. health care system in this country is broken, and we need options that focus on wellness that are affordable. As the number of high-deductible health plans continues to rise, we need new models — such as direct primary care paired with health savings accounts — to ensure that Americans remain healthy.

David Balat is the director of the Right on Healthcare initiative at the Texas Public Policy Foundation. Follow him on Twitter @DavidBalatHC.