Starting this fall, Cumberland County residents will have the option of purchasing a new type of health insurance on the Affordable Care Act marketplace that blends traditional insurance and direct primary care.
Taro Health – a new insurer based in Maine – is offering a potentially first-in-the-nation insurance model that is being teed up for next year. The company’s rates are approved, but plan filings have yet to be finalized by the Maine Bureau of Insurance, so the plans are not yet approved to sell insurance for 2023.
The insurer is targeting about 5,000 people who choose to pay their doctors directly and forgo traditional insurance, a model called direct primary care. Under direct primary care, patients pay out of pocket for routine doctor visits and the type of care that can be done in a doctor’s office, such as diagnosing and treating mild illnesses, some screenings, blood tests and annual physicals.
People who want to switch to a direct primary care doctor would also be eligible for Taro Health plans.
By eliminating insurance paperwork for routine care, direct primary care advocates say, doctors can focus more time on patients and pass on cost savings from not having to process insurance claims.
But that model flounders when patients need specialized care, such as for broken bones, cancer or rare diseases. If they hadn’t purchased insurance in addition to paying direct primary care fees, they would be on the hook for the cost of expensive hospital visits and specialty care. The Taro Health plan is a hybrid of conventional insurance and direct primary care. Members pay a monthly premium for traditional health insurance options and a network of 12 physicians who participate as direct primary care providers.
A COMBINING OF CONCEPTS
“There’s a combining of concepts,” Jeff Yuan, a co-founder of Taro Health, said in an interview Wednesday. “We are insurance. We are not just direct primary care.”
Yuan, of New York City, said his company chose Maine to launch the hybrid insurance model because the state has one of the highest per capita rates of direct primary care physicians in the country. Yuan said he expects Taro Health will expand to the rest of Maine and other markets in the coming years. MaineHealth’s network will be in-network for Taro Health.
Taro Health plans are expected to be available at CoverME.gov starting on Nov. 1. Comparison shopping for the new Taro Health plan and the rest of the ACA marketplace plans were not available on the Maine Bureau of Insurance website Wednesday, but they are expected to be released soon.
Direct primary care has traditionally attracted people who want to have more time with their doctors and have the financial means to pay a monthly membership fee, the cost of routine care and a premium for a conventional health plan to cover major illnesses and injuries.
Dr. Lisa Lucas, a direct primary care doctor in Freeport, said about half of her patients have insurance, and have to pay for her care above and beyond their monthly insurance premiums. Those customers are buying conventional health insurance plans and paying for direct primary care, making it cost prohibitive for some families.
“For a lot of my patients, if they’re paying for insurance, to see me, I’m an extra cost,” Lucas said on Wednesday. “But with a Taro plan, I am no longer an extra cost. It’s included in the plan.”
Starting in 2023, Taro will have a network of 12 direct primary care physicians in Cumberland County that patients can choose from, and Taro Health’s monthly premium will cover the monthly DPC membership fee, which is typically about $75, Yuan said. Out-of-pocket costs would be capped at $9,100, and like other insurance there would be a series of co-pays and caps on drug costs.
Yuan said the emphasis will be on no or low costs for all primary care services to keep patients healthy and thus less likely to need more expensive specialty care.
“The plan is really designed for people who want a different primary care experience,” Yuan said.
Taro Health will also be offering traditional plans on the ACA marketplace, alongside Anthem, Community Health Options, United Healthcare, Harvard Pilgrim and Aetna.
COMPETITIVE PRICING
Yuan said the average silver plan premium for Taro is about $600 per month without subsidies. ACA subsidies typically pay the bulk of the cost of monthly premiums.
“When we developed rates and priced our plans, we worked to ensure we were affordable to Mainers. Our premiums are price-competitive with all the other insurers, with us being a few dollars more or less than the incumbents depending on the metal tier,” Yuan said.
ACA plans are broken into bronze, silver and gold plans, with bronze plans having lower premiums but less generous benefits, and gold offering extensive benefits but higher premiums, with silver a middle-of-the-road plan.
Lucas, the Freeport doctor, said she used to practice medicine outside of the direct primary care model, and found she was spending a few minutes with each patient, and not getting to know them or their needs. Part of that is the traditional model jams as many patients as possible into the system, while direct primary care caters to fewer patients. The other reason she switched to direct primary care is that the insurance paperwork was taking too much time.
“You are filling out forms for the insurance company to get reimbursement rather than focusing on what the patient needs,” Lucas said.
Peter Hayes, CEO of Healthcare Purchaser Alliance of Maine, which advocates for improvements in the health care system in Maine, said that trying different models is welcome as a way to potentially address some of the shortcomings in the health care system.
“We’re excited that there’s a new product in the marketplace that consumers can look at. We like the focus on primary care,” Hayes said. “Time will tell whether their new construct works or not.”
Hayes said one potential pitfall is there might not be enough doctors to care for the volume of patients if direct primary care becomes popular since each doctor sees fewer patients.
This story was updated at 3 p.m. on Sept. 1 to clarify the availability of the hybrid insurance plans.
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