What happens if your doctor stops taking health insurance?

Many doctors, citing cost and time pressures, have opted to charge patients directly rather than dealing with insurance.

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Myles Ma, CPFCSenior ReporterMyles Ma, CPFC, is a senior reporter and certified personal finance counselor at Policygenius, where he covers insurance and personal finance. His expertise has been featured in The Washington Post, PBS, CNBC, CBS News, USA Today, HuffPost, Salon, Inc. Magazine, MarketWatch, and elsewhere.

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Like most doctors, Chris Winter, a neurologist and sleep specialist, accepted health insurance at his practice in Charlottesville, Virginia. But for a decade, he had been contemplating a change. His costs were rising, and as he saw it, the only way he could get paid more under insurance was to see more patients, spending less time with each one.

So starting this year, Winter stopped accepting insurance and started billing patients directly. It’s saved him “an unbelievable amount of time within our clinic,” Winter says. “The billing, the fighting with insurance.”

Winter isn’t alone in deciding to drop insurance. Many mental health therapists don’t accept insurance, and among primary care doctors, there’s a growing movement for “direct care” models. 

Winter says the decision has allowed him to focus his efforts on actually practicing medicine.

“I’m not saying this is what everyone should do, but it is absolutely right for us and our practice,” he says.

Why doctors drop insurance

The U.S. health care system is the most expensive in the world, [1] but its people are far from the healthiest. Even among Americans with health insurance, 41% have avoided getting medical care because they knew or feared insurance wouldn’t cover the costs. It’s a situation neither patients nor providers are happy with, says Dr. Harry J. Heiman, a professor at Georgia State University’s School of Public Health who practiced family medicine for 20 years.

Because of the way insurance companies reimburse, many doctors feel they are incentivized to “do more stuff,” regardless of whether it provides value to their patients.

“A physician’s compensation is very much tied to the number of patients they see, the number of procedures they do, the number of tests they do,” Heiman says. 

Because of that, it makes sense that many doctors have sought out systems where patients pay them directly, they have a guaranteed income, and they can spend more time with each patient, he says. 

Winter had some insulation before taking the plunge into direct care. He has multiple sources of income from consulting with sports teams and the military, from writing books, and speaking, but the costs of his practice were growing to the point that he would have closed it had he kept taking insurance. Things came to a head at the start of the year when several insurance providers said they would stop covering his practice “in-network,” something he learned about from patients. 

Winter took it as a sign it was time to let go of the rest of their insurance plans.

How do direct care practices work?

Dr. Josh Umbehr has seen the movement toward direct care grow since he started in medicine in 2000. 

“A lot of times doctors weren’t trying to do anything different or add any value. They were just leaving insurance out of frustration,” he says.

Umbehr launched his direct care practice, Atlas MD, in Kansas in 2010 and also markets practice management software to direct care providers under the same name. His practice charges $10 a month for children, and $50, $75, or $100 a month to adults depending on age. The fee buys you unlimited visits, including at your home and office, with no copays. 

Because he controls the number of patients he has, Umbehr can communicate more frequently with patients, for example, asking someone with pink eye to send a picture every hour. Any procedure that can be done in the office is free, from electrocardiograms to stitches. The office also dispenses medication directly to patients at significant discounts. 

Umbehr’s company has helped hundreds of doctors join or explore direct care practices. Ideally, Umbehr says health care should look more like car insurance. With your car, you pay for gas, oil, and maintenance, while insurance covers more expensive accidents. The direct care model isn’t meant to replace hospitals. 

Many patients use health savings accounts to pay for direct primary care, Umbehr says. The IRS hasn’t explicitly said this is an approved use of HSA funds, but it hasn’t stopped it, either. On Thursday, U.S. Senators Bill Cassidy, Jeanne Shaheen, Tim Scott, and Mark Kelly introduced a bill that would codify the use of HSAs to pay for direct care. [2] Similar bills have previously stalled out in Congress.

A common criticism of such models is that they can leave patients behind who can’t afford the regular fees. Winter says he plans to be flexible with patients who can’t afford his fees. 

“If you talk to any doctor there are lots and lots of people who are not paying them already,” Winter says. 

Since making the switch, Winter and a nurse practitioner see no more than 14 patients each per day. He now bills his patients at time of service, with fees ranging from $120 for follow-ups up to $275 for sleep study interpretations. 

What can you do if your doctor stops taking insurance?

While Heiman says he doesn’t blame individual providers for taking this step, he says some patients will be left behind if their doctor stops taking insurance and they can’t afford the fees. People will still need to buy health insurance to protect against the cost of catastrophic illnesses or accidents, so insurance premiums can’t just be redirected to provider fees.

“All it takes is one unanticipated serious illness or emergency department visit and it can be literally tens of thousands of dollars,” Heiman says.

For specialists like Winter, the fees he charges may simply replace a copay. But since primary care visits are often covered by health insurance, the fees will be an extra cost for people.

Switching to direct care may be worth it for people who can afford the fees and feel the extra TLC they might get from their doctor is worth it. It may also help to set aside the fees ahead of time in an HSA. But Heiman worries that doctors who take this step may end up restricting themselves to a healthier, more affluent group of patients.

If your doctor decides to move to a direct care model, Winter says to talk to them about it.

“Call your doctor,” he says. “Have a conversation with your doctor. This is not a mean or belligerent act that they’re probably engaged in, or a money grab. It’s probably an act of survival. It’s probably an act that has you at the center of it.”

Image: RichLegg / Getty