Atlas Direct, is offering supplemental insurance for people who use direct primary care and those looking for a limited alternative coverage to pricey Obamacare plans.
Atlas Direct launched on December 3 and is now available in 13 states: Alabama, Arizona, Connecticut, Georgia, Hawaii, Iowa, Massachusetts, Michigan, Nebraska, New Jersey, Rhode Island, Tennessee, and Wisconsin.
“We’ve been thrilled with the response from doctors and patients across the country,” said Atlas Direct CEO and cofounder Josh Umbehr, M.D. told Health Care News. “We were fortunate enough to be interviewed on national radio that first week and had hundreds of calls, texts, emails, and live chats from interested patients.”
A Simple Plan
The company has one plan available at present, with a maximum payout of $100,000 per calendar year per covered person. The plan can be paired with primary-care arrangements and other supplemental plans. It does not currently include vision or dental coverage. The plan is designed to supplement a direct primary care membership.
As a supplemental insurance plan, Atlas Direct requires medical underwriting and places limits on eligibility. The most common question consumers ask is, “When will you get to our state?” said Umbehr.
Indemnity-style plans, like Atlas Direct’s and those offered by Aflac and other insurers, pay a cash benefit in the event of hospitalization, surgery, or injury, supplementing major medical insurance. The plans act as a contract between individuals and their insurance company, with an agreement to pay a set amount.
DPC Compatibility
A unique aspect of Atlas’s plan is the requirement that buyers enroll with a direct primary care (DPC) practice and pay $1 per month for membership in the Direct Care Foundation.
This provision protects Atlas Direct and policyholders against an array of government insurance regulations because the insurance can be viewed as a membership benefit. Promoting DPC fits well with the model. Umbehr is a DPC physician himself.
“It feels counterintuitive that the answer to more affordable insurance is to use or have less insurance, but the goal of direct primary care models is to make 80 to 90 percent of care too cheap to insure, which opens the door for making health insurance 80 percent more affordable,” said Umbehr. “Now we’re actually combining an indemnity model of care, for large things, with the direct care model which is maximizing affordability of care.”
Direct primary care typically offers unlimited visits, no copays, wholesale pricing, and free procedures such as imaging and labs. DPC can provide discounted generic drugs and large savings on more complex lab work.
Not a ‘Health Plan’
Indemnity insurance pairs well with DPC because it resembles true insurance, says Twila Brase, R.N., the president and co-founder of Citizens’ Council for Health Freedom.
“It’s meant to pay for a limited set of services in which the costs are not covered by the DPC contract or other coverage,’ said Brase. “As Atlas notes, it’s supplemental; it’s not primary.”
“Before health plans existed, indemnity insurance was the primary form of health insurance,” said Brase. “It was a contract to pay defined benefits, like Atlas, but much more comprehensive.”
Companies such as Blue Cross, UnitedHealthcare, and Cigna had offered indemnity plans, but the Affordable Care Act (ACA) changed that in 2010.
“Currently, the ACA does not allow for catastrophic coverage, or indemnity-style policies, and requires most Americans to sign up for ‘health plans’ with high deductibles and premiums,” said Brase. “The Atlas policy is likely filling a hole that many Americans face in the aftermath of the unaffordable ACA.”
Keeping Middlemen Out
Indemnity policies can address many of the health care complaints universally heard today, says Brase.
“When there were indemnity plans, there was no quibbling, no prior authorization, no post-treatment denials of payment, no corporate protocols controlling physicians and medical decisions,” said Brase. “Many people forget what real health insurance is and how inexpensive it used to be.”
Obamacare has increased insurance companies’ control over medical decisions, says Chad Savage, M.D., the founder of YourChoice Direct Care and policy advisor to The Heartland Institute, which co-publishes Health Care News.
“Unlike today’s health plans, which pay doctors and hospitals directly for care, enmeshing insurers in the details and control of patient care, indemnity insurance reimburses the patient directly for the direct and associated costs of care for covered medical events,” said Savage. “This leaves the choices in care to the doctor and patient without enthralling insurance middlemen in the decision-making about the care that is being provided.”
Reforms in the Wings
Government policies that support expanded options such as the Atlas model may be on the horizon, says Savage.
“The new administration is already demonstrating ‘out of the box’ thinking regarding numerous challenges, and health care is not likely to be an exception,” said Savage. “We also see movement from legislators, such as [Rep.] Chip Roy of Texas, who introduced the Healthcare Freedom Act, which would free HSAs to be used with direct primary care practices.”
In its newly updated American Health Care Plan, The Heartland Institute, which co-publishes Health Care News, recommends states define DPC as “not insurance,” to encourage more physicians to offer direct-pay practices.
“To cut care and coverage costs requires a return to the cash-paying major medical indemnity policies of old, which is real insurance for catastrophic and insurable events,” Brase said. “Only cash and cost-sensitive patients will restore market-based prices, competition, and patient-centered quality of care.”
“I really think Atlas is on the right track,” said Savage. “It is very inexpensive as far as insurance goes, and at least conceptually it could be combined with DPC to provide high levels of financial protection at minimal cost.”
Ashley Bateman ([email protected]) writes from Virginia.
