In 2016, the share of people between 65 and 74 who were still working was over 25%. Any of them working at employers with more than twenty employees covered by group health plans are required by law to be included in the employer’s plan. They may also enroll in Medicare Part B. Some employer plans even require their Medicare-eligible employees to enroll in Part B. When optional for the employee, the choice to add Medicare Part B and have dual coverage is typically made by relatively heavy utilizers looking to meet cost-sharing burdens by having Medicare as a secondary payer.
In any event, elder employees with dual coverage will have low, or even zero, out-of-pocket expenses, whether for primary care visit fees; for the types of services, like basic labs, often included in an employer DPC package; or for downstream care. These elders have relatively little incentive to join DPCs, especially in cases where the employee pays more for a DPC option than for a non-DPC option (such as Strada Healthcare’s plan for Burton Plumbing).
Many with dual coverage will have even more incentive to avoid DPC. A large majority of DPCs, including DirectAccessMD, Strada Healthcare, and many Nextera-branded clincs, have opted out of Medicare. Medicare-covered employees who receive ancillary services that the DPC performs for separate charge will be expected to see that the DPC gets paid, but will receive no Medicare payment for those services. A Medicare-covered employee in Nextera’s St Vrain Valley School District plan, for example, would be denied the ability to have Medicare pick up his cost-share for Nextera’s in-office labs and immunizations, Nextera’s on-site pharmacy, or Nextera’s on-site cabinet of durable medical equipment. Were a dual covered employee to choose the Nextera clinic, she would have to make a point of declining to have Nextera draw her blood work or put her in a walking boot.
Most employer workforces have a relatively small percentage of employees over age 64. But provider health coverage for these elders is apt to be very costly. The employees likely to be most costly are the very ones that will find Medicare Part B’s annual premium of less $1750 a good bet for avoiding cost-sharing burdens like those in Nextera’s SVVSD plan – a $2000 deductible and a $4000 mOOP.
Accordingly, those with dual coverage are likely to be high utilizers of services with nothing to gain from DPC. Or, worse: some will pay more in employee contributions; some will have added costs and/or inconvenience owing to Medicare opt-out by the DPC provider.
These high-cost, dually-covered employees will disproportionately end up in the non-DPC cohort under most employer DPC option plans. And every one of them will skew non-risk-adjusted claims data, contributing to a selection bias artifact masquerading as DPC savings.
Much the same reasoning will apply to other employees who have a secondary coverage, such as being a covered spouse. Dual coverage usually comes at a price, such as a premium add-on for spousal coverage. But the price will often be worth it for high utilizers whose primary coverage has high cost sharing burdens that can be brought to negligible levels. For these high utilizers, the incentives to select a DPC option are minimal, even negative if the DPC option comes with a larger employee contribution.
Finally, whatever the source of secondary coverage, the heavy utilizers for whom it is particularly desirable are also the very people most likely to cling to particular PCPs who have served them well in the past, rather than sign on with a DPC clinic offering a narrow choice.