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This open enrollment, we should reevaluate insurance model

Paul Thomas and Geoffrey Ginter
Published 11:00 p.m. ET Nov. 23, 2020

It’s November in America, which means three things: Thanksgiving, football and open enrollment for medical insurance.

The open enrollment period is the span when health insurance companies allow anyone to purchase insurance plans, and typically runs from early November to mid-December. Those who do not enroll in health insurance during the open enrollment period are typically unable to obtain insurance until the following year unless they have extenuating circumstances that qualify them to apply outside the open enrollment period.

Why is purchasing medical insurance limited to a specific period, when buying policies for auto and homeowner’s insurance are not subject to the same restrictions? The answer essentially comes down to who purchases the policies and when. For example, with car insurance there is no specific group that would file claims at such a significant rate that the cost of paying out claims would exceed the money paid to the insurance company in the form of premiums.

With health insurance, there are distinct populations, specifically individuals who are older or have serious medical conditions, who account for a disproportionate amount of health care spending due to increased medical expenses. This means that, theoretically, the sustainability of the health insurance industry hinges on having young, healthy people paying more in premiums than they take out in expenses.

Without regulations in place, most people would only sign up for medical insurance when they became very ill, which could potentially bankrupt the insurance companies. Insurance providers previously avoided this by denying insurance to individuals with pre-existing conditions. This practice was banned with the passage of the Affordable Care Act, so insurance companies began holding open enrollment periods as a means of keeping the insurance industry more profitable.

With an open enrollment period, everyone — young or old, healthy or sick — purchases their insurance for the year without knowing whether or not they will use that coverage. This ensures that the insurance companies have enough healthy people to sustain payments for those who are older and sicker.

If all this sounds confusing, it’s because it is. While insurance can provide essential coverage for people with catastrophic medical expenses like hospitalizations, it can unnecessarily complicate care for people who are generally healthy and only require outpatient office visits. Many people who are unaware of open enrollment deadlines may miss out on enrolling in insurance for the year, which can lead to exorbitant expenses when trying to pay out-of-pocket at a typical fee-for-service medical office.

My practice uses a direct primary care model, which forgoes the concept of paying by the visit in favor of an affordable, subscription-based system. For a fixed monthly rate, my patients have access to high-quality primary care without having to worry about deductibles and copays.

While most of my patients do carry insurance for emergencies, my practice allows them to have direct access to me without an insurance company acting as the middleman for their primary care needs.

The membership model also eliminates the need for an open enrollment period, so anyone seeking care can join at any time. This allows us to fill the gap for people who miss the open enrollment window and do not qualify for special enrollment who would otherwise have difficulty accessing affordable medical care.

Paul Thomas is a physician with Plum Health DPC. Geoffrey Ginter is a third year medical student at Wayne State University School of Medicine. 

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