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Direct Primary Care and High Deductible Health Insurance

It’s almost Open Enrollment season for the Marketplace, and it’s the time of year where we can get confused about health insurance. I am writing a series of articles to answer general questions about why Direct Primary Care works so well with certain kinds of health insurance. This first article is about Direct Primary Care and high deductible health insurance.  (Of note, people with employer based health insurance typically have fewer plan choices, so it’s not quite as overwhelming, though this information is still relevant.)

What is the deductible?

The “deductible” is the amount of money that you have to pay before your insurance will start paying for your care.  This can be confusing because your insurance HAS to pay for certain things (your annual exam, your mammogram, your screening colonoscopy, most immunizations) so you don’t have to deal with your deductible for those services.  However, if your mammogram or colonoscopy shows something suspicious and you need a biopsy, now you have to think about your deductible because you have to pay for the biopsy.  Additionally, if you see your primary care physician for a cough or for back pain, you may have to pay for the entire visit AND any labs or imaging that might be needed.  You won’t even know how much you pay until weeks later, which is an aggravating aspect of the health care system.

Is my healthcare free after I pay my deductible?

After you pay your deductible, your insurance will start paying more for the care you receive that year, though you probably still have “co-insurance” to pay, which is often 20% of whatever you are charged.  It means that your insurance is picking up most of the charge (after you paid your deductible) but that you still can expect a bill.  You will probably also still have your co-pay on your office visits (generally $20-40 per visit depending on whether you’re seeing your primary care doctor or a specialist).

What is a high deductible versus a low deductible?

Deductibles can vary widely.  Looking on the cost estimator site for PPO plans at Healthcare.gov for a family of 4, a deductible ranges from $14000 for the Blue Cross Premier PPO Bronze HSA to only $1500 for the Blue Cross Premier PPO Gold.  Of course, the monthly cost for these plans is quite different, and the high deductible plan is $1130/month cheaper than the low-deductible plan.  Your actual monthly cost for these plans varies with your income, age, tobacco use history and household size, so I am just showing the difference in the monthly costs for discussion purposes.  (Of note, I wrote a separate article about PPO vs HMO plans).

High Deductible Plans are cheaper because you take on more of the risk for your health care costs in a given year.  Depending on your income, you might be able to get a Bronze high deductible plan for no/low monthly cost off the Marketplace.  You can then use a fraction of that money that you are saving to pay for a membership at NorthCountry Health Direct Primary Care!

How does NorthCountry Health Direct Primary Care work well with a high deductible plan?

NorthCountry Health DPC is not an insurance plan.  However, a membership at NorthCountry Health Direct Primary Care can work well for patients with the high deductible plans because you can count on getting your primary care (and likely most of your urgent care needs) for a low, fixed monthly cost.  At NorthCountry Health, there are no co-pays, no co-insurance and no surprises.  We offer other ways to save you money because we offer cash-pay prices on labs and cash-pay prices on common generic medications.  We have the time to look into cheaper options for imaging studies that might work for you.  We can even help you find cash-based surgery centers in the Midwest!  You can still use your insurance for labs, medications, imaging and specialist procedures if you want to, but you’ll have the opportunity to do the math and figure out what will be the best deal for you.

If you have further questions about Direct Primary Care and how it might work for you and your family, please reach out and set up a free meet and greet with Dr. Ryan Brang.

It’s almost Open Enrollment season for the Marketplace, and it’s the time of year where we all get confused about what kind of health insurance we should have.  I am writing a series of articles to answer questions about why Direct Primary Care works well with certain kinds of health insurance.  This third article is about Health Savings Accounts.

HSA (Health Savings Account)

An HSA is a Health Savings Account, and it is sometimes offered to people who choose a high deductible health insurance plan.  I wrote a separate post on high deductible plans.  An HSA gives you the opportunity to save pre-tax money in a savings account that grows interest tax-free.  There are annual limits on what you can put in (2022 is $3650 for an individual and $7300 for families).  When you take out the money to pay for health care expenses, that money isn’t taxed either.  In the world of personal finance, this is a fantastic deal.  At the same time, the benefits of an HSA tend to go to people who have the extra money to save in an account like this.  However, an HSA is a great way to reduce the amount of risk that you are taking on with a high-deductible insurance plan, because you don’t lose this money at the end of the year.  It is your money, and you can save it for when you do have an expensive year and are going to meet your deductible.  I like to think of an HSA is a form of self-insurance for catastrophes.  Low deductible plans don’t offer HSAs because you are asking the insurance company to take on more of the risk for your health insurance costs, and so you don’t get access to this deal.

FSA (Flexible Spending Account)

An FSA is a Flexible Spending Account.  I am including it here because it causes confusion when discussing HSAs.  An FSA is sometimes offered by your employer as part of a health insurance plan.  If you are getting your insurance off the Marketplace, you don’t have access to an FSA.  FSAs are nice because they are also a savings account where you can put in money tax-free and take it out tax-free to use for qualifying medical expenses (there are long lists online of what is allowed).  In my opinion, FSAs are annoying because you have to estimate the amount of money that you want to put in an FSA at the beginning of the year and then you have to spend it or you lose it.  As someone who has had to use leftover FSA money to buy first aid kits that I didn’t need because I didn’t know that glasses were an allowable expense, I find them less useful than an HSA, but they can pair well with a lower deductible plan to cover co-pays, dental work and…glasses!

Can I use HSA or FSA money for Direct Primary Care membership fees?

This can be a thorny issue.  I am neither an accountant nor an expert on the many rules from the IRS.  From what I have read, FSA funds can sometimes be used for DPC membership fees.  It can be up to the employer to decide if it is an allowable expense.  My best recommendation on the use of HSA money for Direct Primary Care membership fees would be to ask your accountant.  Even if you can’t use your HSA funds for your DPC membership fees, you can save that money basically forever, so you could wait to use it until you need to pay for an MRI or a knee surgery! 

 

NorthCountry Health Direct Primary Care

717 W. Washington St. Ste A, Marquette, MI 49855

Phone: 906-936-3499 - Fax: 906-224-2562

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