With rates for individual health insurance policies approved to increase next year, some Washingtonians may be searching for alternatives to traditional health insurance, says Matt Dinsmore, CEO of Spokane-based Direct Primary Care LLC.

The Washington state Office of the Insurance Commissioner announced in September that rates will increase by an average of 10.7% next year, with some companies’ rates going up as much as 23%.

"I know this rate increase will hit hard for many people, especially at a time when other expenses are up," says insurance commissioner Mike Kreidler in a press release.

Dinsmore’s clinic, aptly named after the health care model it adopted, opened in 2018 at 212 E. Central, on the Providence Holy Family Hospital campus.

“In the direct primary care model, we don’t bill insurance,” says Dinsmore, a nurse practitioner. “It doesn’t matter whether people have insurance or not.”

Patients of Direct Primary Care, and others like it, pay a monthly fee to access unlimited primary care and urgent care services. It is not a form of insurance.

Dinsmore compares it to a gym membership.

“A patient could come in everyday if they wanted,” he says. “There’s no additional fee for that.”

Including Dinsmore, Direct Primary Care has three providers, all of whom are nurse practitioners. The clinic has five total employees.

The direct primary care model has grown in popularity since Dinsmore opened his clinic, he contends.

“Since I’ve started, there’s been four more that have popped up, which to me shows that consumers are changing the way they’re looking at approaching health care,” says Dinsmore.

Growing at a rate of about 200 new patients a year, Dinsmore’s clinic now has over 1,000 members.

Dinsmore says part of the reason for that growth is health care becoming more expensive.

The monthly membership cost at Direct Primary Care is $79 for individuals, $149 for individuals plus dependents or individuals plus a spouse, or $199 for families.

While Direct Primary Care doesn’t charge copayments or other insurance-related fees, there are out-of-pocket costs in some instances, like with medications that are administered, for example.

“It’s transparent pricing. If it costs us $4 to do a steroid shot in a shoulder, we charge the patient $4 to help us replace the medication that we administered,” Dinsmore explains. “It’s not a profit incentive.”

The clinic provides medications at wholesale costs, which are often up to 90% cheaper than retail prices, according to the Direct Primary Care website.

Labs that can be processed in office are included in the monthly membership. For labs that must be sent to lab-processing companies, patients have access to discounted pricing that has been negotiated by Direct Primary Care.

“They’ll bill us 90% less than what they bill an insurance company,” Dinsmore says.

Direct Primary Care also helps its patients navigate services like imaging and specialty care by finding the most affordable options in the area, Dinsmore says.

“We try to find local resources that benefit the patient based on what product they have, which could be insurance or no insurance,” he says.

About half of Direct Primary Care’s members also have some form of traditional insurance to cover higher-cost care and procedures that aren’t considered primary or urgent care, like surgeries, for example.

Dinsmore says one common scenario is patients who have a high-deductible plan with a health savings account but couple it with a Direct Primary Care membership. They typically try to use the membership for all primary care, and even to get lab and medication discounts without billing their insurance, and only use the HSA funds and insurance plan for high-cost procedures and care.

The other half of Direct Primary Care’s members either have no form of traditional insurance or additional coverage, or are members of cost-sharing groups, also referred to as health care sharing ministries.

Cost sharing groups, which in Washington are religiously affiliated, are also membership based, but cover more expensive procedures or specialized health care instead of lower-cost primary care and urgent care services. They don’t cover preexisting conditions, however.

“Cost-sharing groups are usually good for those who don’t have chronic conditions that they need to see a specialist for,” Dinsmore says.

Cost-sharing memberships also aren't a form of insurance.

The membership fees collected by these organizations are pooled together and then paid out to members who submit qualified claims.

Michael Marchand, deputy commissioner of the Washington state OIC, is skeptical of cost sharing groups. They are risky, he says, because they don’t include the same consumer protections that come with traditional health insurance.

“You’re never guaranteed payment for anything, and in many cases, your consumer protections are gone that would otherwise exist if you actually had an insurance plan,” Marchand says, noting that members of such groups must sign agreements that include varying stipulations to qualify for reimbursements. 

Marchand says his office has encountered problems for consumers with health care sharing ministries in the past, including with the language the organizations use to describe their offerings.

“Their features closely mimic traditional insurance products, and I think that’s where it gets often confusing for consumers,” Marchand says. “We’ve issued over a million, close to a million and a half dollars in fines to respective health care sharing ministries over the years.”

Although they are both membership-based alternatives, Marchand says the direct primary care model is different than cost-sharing groups but adds that consumers should still be cautious of any alternatives to traditional insurance.

“If you’re even thinking about joining one of those organizations, you should call our office first to see if they’re legitimate,” Marchand says.

Marchand says he can see the value in the direct primary care model as long as consumers understand the limitations.

“The primary care clinic model, you at least have an idea of what you’re buying into,” says Marchand. “When you think about the health care sharing model, you’re just paying into a pool. So when you submit a claim, regardless of what it is, you may not get any of that honored.”

Ultimately, Marchand says Washingtonians should explore traditional insurance options because of the legal protections.

“We live in a state that has a number of viable traditional insurance options,” Marchand says. “With the introduction of the Affordable Care Act and the creation of our state-based exchange for the individual market, there’s a lot of opportunities there for individuals to pick up health insurance.”

Dinsmore notes that there is a Washington state law that protects consumers utilizing direct primary care clinics. Direct primary care clinics also must register with the OIC.

According to the Washington State Legislature’s public policy section of the law Dinsmore refers to, direct primary care clinics, or direct patient-provider practices, as the Legislature calls them, “represent an innovative, affordable option which could improve access to medical care, reduce the number of people who now lack such access, and cut down on emergency room use for primary care purposes, thereby freeing up emergency room facilities to treat true emergencies.”