On Saturday, a married couple who are business owners signed up for CovenantMD.  They emailed us shortly after signing up, and I would like to share with you some of their comments (used with their permission):

“Our new rates came in from the Affordable Care Act with a whopping price tag of $23,925/year premium, $9,000/year annual deductible, and a $14,300/year maximum out-of-pocket.  That said, if we continue with regular health insurance, we would lose our business.  Our first thought was that we would pay the fine (for going without insurance).  Then we heard about Christian Healthcare Ministries and CovenantMD.  I see that using services like yours in combination with a Christian sharing plan is the only choice for small business owners.”

What do they mean by “services like ours?”  CovenantMD is doing something called Direct Primary Care.  In essence, we are contracting directly with our patients and not billing health insurance.  Doing this allows us to offer our patients valuable amenities that help to reinvigorate the doctor-patient relationship.  Find out more about Direct Primary Care and CovenantMD here, here, and here.

Brief disclaimer:  Beware of doctors with blogs.  They are NEVER a replacement for your living, breathing physician, nor are they replacements (as in the case of this post) for an insurance broker or a financial advisor.  I recommend consulting with one or both of these experts as you make decisions for your health insurance for 2017.  

Let me take a second to jump straight to the bottom line (although I hope you read to the end of this post to get the finer print).  I’m going to make two points in this post.  Strictly in terms of cost savings:

1)  A higher deductible, lower premium PPO plan plus Direct Primary Care offers the best savings if you are purchasing your plan from the Exchange and you are eligible for subsidies, OR you have an employer-sponsored plan and your employer is subsidizing part of the insurance premium.

2)  A sharing plan plus CovenantMD saves you the most if you bear the full cost of your insurance premium or if it is minimally subsidized.

We are only one week into open enrollment, and already there has been a dramatic uptick in families, and businesses, considering both Direct Primary Care (with CovenantMD) and sharing plans.  Many people are being met with the bad news that their health insurance premiums are increasing 50 to 100%.  And in some cases deductibles are out-of-pocket risk is increasing despite the increase in premiums.  The situation is forcing many look into outside-of-the-box options for healthcare.

Two weeks ago, I wrote a blog post describing how CovenantMD works with traditional health insurance to greatly decrease total out-of-pocket health care costs.  In this post, I will discuss Christian sharing plans.  It seems every November the 1st starts a three-month season of increased business for the sharing plans.  The same happened in our market last year with the Highmark debacle.

So what are sharing plans?  The concept is simple.  Members of the plan pay monthly toward a central pool, and that pool is then used to pay for members’ healthcare expenses that exceed a certain out-of-pocket threshold.   That threshold might be accrued on a per-incident basis, or it might accrue on a yearly basis, like a typical annual deductible.  Health care expenses are paid by members out-of-pocket, and then the plan reimburses members directly.  Premiums cost anywhere from $45 per month for an individual, to $495 per month for a family, depending on the level of "sharing" that you elect.  The advantages of sharing plans consist of the very low “premium,” and the incentive the plan places on its members to shop for the best healthcare at the lowest prices.  The Affordable Care Act does recognize sharing plans as “insurance,” meaning that sharing plan members do not incur the tax penalty of being uninsured.

There are three sharing plans that are active in our local market.  In order of my impression of their local market share, they are Samaritan Ministries, Christian Healthcare Ministries, and Medi-share.  A fourth, Liberty Healthshare, is not yet active in Pennsylvania.   

Sharing plans are not for everybody.  Most are faith-based ministries that require a statement of faith, a commitment to abstain from tobacco, and a commitment to use alcohol sparingly.  To keep costs down, most plans will not cover pre-existing conditions before a pre-determined period of time has passed.  Thirdly, there is a cap on how much the plan will pay toward a claim.  This cap can vary from $250,000 per claim (for Samaritan), to $100,000 per claim (for Christian Healthcare Ministries).  Most plans will allow members to increase the per-claim cap for an additional monthly fee.

Sharing plans are well-represented among the patients of CovenantMD.  That is because a sharing plan + Direct Primary Care arrangement is a hand-in-glove way to keep healthcare costs down.  Direct Primary Care ably covers the common stuff for a fixed monthly fee, which for a family is typically less than what they would pay for cable.  The sharing plan would then reimburse for expenses that occur outside of DPC.  

Let’s run some numbers.  In my blog post about health insurance two weeks ago, I proposed a hypothetical family of five that shops for their insurance on the exchange.  I then proposed a year in their health care lives, with things like an urgent care visit, stitches, etc.  I then created a table that compared three health insurance scenarios for this family, with numbers taken directly from the exchange:  a gold plan, a bronze plan, and a bronze plan + CovenantMD.  I’ve reproduced this table below, and I added a fourth column for Samaritan Ministries.  Recall that this table represents a hypothetical family of five in Lancaster County, making the median income of $56,000.  It’s important to remember, again, that this level of income qualifies this family for $768/month in subsidies, or a $768/month *discount* off the price of the premium.  Here is the comparison:

Again, the take away from this table is that Direct Primary Care pairs well with a high-deductible insurance plan, or an alternative plan, like a sharing plan, that is also geared toward covering less common, more expensive occurrences.  You can see in this table that when the insurance premiums are subsidized, a standard high-deductible PPO comes in ahead of a sharing plan + DPC arrangement.

Now let’s adjust one thing with this table.  Let’s raise our hypothetical family’s income from $56,000 to $75,000 per year, a level at which they will no longer enjoy discounts off the price of premiums.  In this scenario, the cost difference between higher-deductible PPO insurance and sharing plans widens considerably.  Here is the table again under this scenario:  

The big difference here is that when health insurance premiums are not subsidized (in other words, when you have to pay the full amount of your premiums), the sharing plan + DPC arrangement offers the most cost savings.

In closing, I'll reiterate my two take-home points for this post.  Strictly in terms of cost savings:

1)  A higher deductible, lower premium PPO plan plus Direct Primary Care offers the best savings if you are purchasing your plan from the Exchange and you are eligible for subsidies, OR you have an employer-sponsored plan and your employer is subsidizing part of the insurance premium.

2)  A sharing plan plus CovenantMD saves you the most if you bear the full cost of your insurance premium or if it is minimally subsidized.

To find out more about sharing plans, you can visit the websites of Samaritan Ministries, Christian Healthcare Ministries, and Medi-Share.  To find out more about CovenantMD and Direct Primary Care, give us a call to schedule a free info session.  You can also come to our office on Tuesday, November 15th at 7pm for a group info session.  RSVP for this event to lancasterdpc@covenantmd.net.  

Patrick Rohal, MD is a family doctor and the founder of CovenantMD, a Direct Primary Care practice in Lancaster, PA.  He lives in Landisville with his wife, Lynn, and three kids.