By Peter Cameron

The Badger Project

An innovative healthcare approach that cuts out insurance companies— and with them, surprise charges — could get a boost in Wisconsin with the passage of a bill moving through the Legislature.

State Sen. Rachael Cabral-Guevara, a Republican from Appleton, has again introduced legislation that would exempt this newer model, called direct primary care, from health insurance law and regulations, as well as define the specifics of agreements between patients and those providers.

Direct primary care is a membership-based healthcare system in which patients pay a flat, monthly fee out of their pocket, rather than for visits and services. Most care is then covered by the membership fee. Proponents argue it gives doctors more time and personalized care with their patients and cuts much of the headache of dealing with insurance companies and surprise charges from out-of-network providers.

Cabral-Guevara, the chair of the Senate’s health committee, is also a nurse practitioner who runs her own healthcare practice.

“Direct primary care has become more popular over the years simply because insurance costs are going up,” she said.

Her bill aims to provide some protections for the young industry as it grows, the senator said, and also protections for patients, by defining and clarifying primary care agreements.

These types of laws, which have passed in states across the country, shield direct primary care practices from being regulated like traditional health insurance companies, reinforcing the model’s focus on direct patient-physician relationships without third-party payers, said Amanda Preimesberger, a physician and the founder of rootsMD, a direct primary care practice in Madison.

“Direct primary care agreements are not insurance plans,” she wrote in an email. 

Without clear legislation, regulators may classify them as such, subjecting direct primary care practices to complex regulations, like obtaining insurance licenses, that could force increased costs on them, Preimesberger noted. That would result in higher prices for patients, blowing up the entire premise of direct primary care, which can keep costs low due to the lack of middlemen.

Nicole Hemkes, a physician who founded Advocate MD, a direct primary care practice with several clinics in Dane County, said the vast majority of her patients also have health insurance on top of paying her membership fee, “but they are using us for the majority of their stuff.”

Folks with high deductible plans in the thousands of dollars likely have to pay for most healthcare services at a traditional clinic out of pocket, so buying membership-based direct primary care and using it for most of their healthcare on top of paying insurance premiums can often be cheaper for the patient.

“We are filling that gap,” Hemkes said.

Regarding the bill, Hemkes said she had “mixed feelings,” as she worries it might hold direct primary care practices to a higher standard than traditional ones, but overall she is supporting it.

A version of the bill has been introduced for several legislative sessions, according to Cabral-Guevara’s office. After passing both houses of the legislature with only Republican votes in 2019, Gov. Tony Evers, a Democrat, vetoed the bill due to fears it might be discriminatory, the senator said.

Seeking to win over the governor, Cabral-Guevara got an opinion from the Legislative Research Bureau, a nonpartisan government agency that assists legislators in developing and analyzing bills, saying other laws on the books already offer discrimination protections. A recent U.S. Supreme Court case affirmed those protections for gay or transgender people, she noted.

The governor’s press office did not respond to messages asking if those things have changed his mind.

Potential drawbacks of direct primary care

Direct primary care does not make sense for everyone. Memberships do not cover everything, and patients still need to buy insurance so they are covered for major medical expenses and specialty care. But memberships are relatively inexpensive, generally around $50-100 per month depending on age and location, and may be cheaper than paying for healthcare services out of pocket under high-deductible plans.

Also, direct primary care memberships may not accept Medicare and Medicaid, limiting their access for some. And because it is not part of your health insurance, spending on memberships have no effect on your deductible.

— The Badger Project is a nonpartisan, citizen-supported journalism nonprofit in Wisconsin.