April 29, 2016 | By Mike Maharrey
NASHVILLE, Tenn. (April 29, 2016) – On Wednesday, Tennessee Gov. Bill Haslam signed a bill into law that will help facilitate healthcare freedom in the Volunteer State.
Sen. Kerry Roberts (R-Springfield) introduced Senate Bill 2443 (SB2443) on Jan. 21. Known as the “Health Care Empowerment Act,” the legislation specifies that direct primary care agreements (sometimes called medical retainer agreements) do not constitute insurance, thereby freeing doctors and patients from the onerous requirements and regulations under the state insurance code.
“A direct primary care membership agreement is not insurance and is not subject to regulation by the department of commerce and insurance. Entering into a direct primary care membership agreement is not the business of insurance and is not subject to regulation under title 56.”
The full Senate passed SB2443 32-0 on March 14. On April 4, the House passed an amended version of the legislation 81-5. The Senate unanimously concurred with the amendments on April 11. With Haslam’s signature the law will take effect July 1, 2017.
According to Michigan Capitol Confidential, by removing a third party payer from the equation, medical retainer agreements help both physicians and patients minimize costs. Jack Spencer writes:
“Under medical retainer agreements, patients make monthly payments to a physician who in return agrees to provide a menu of routine services at no extra charge. Because no insurance company stands between patient and doctor, the hassles and expense of bureaucratic red tape are eliminated, which have resulted in dramatic cost reductions. Routine primary care services (and the bureaucracy required to reimburse them) are estimated to consume 40 cents out of every dollar spent on insurance policies, so lower premiums for a given amount of coverage are another potential benefit.”
This represents the kind of cost control Obamacare promised, but failed to deliver.
Under Obamacare, regulations define such programs as a primary care service and not a health insurance plan, and current IRS policy treats these monthly fee arrangements just like another health plan.
Several states including Idaho, Oklahoma, Mississippi, Texas and Missouri passed similar bills in 2015.
A FIRST STEP
Oftentimes, supporters of Obamacare criticize opponents for not having any alternative. Direct primary care offers one.
These direct patient/doctor agreements allow a system uncontrolled by government regulations to develop. It makes doctors responsive to patients, not insurance company bureaucrats or government rule-makers. Allowing patients to contract directly with doctors via medical retainer agreements opens the market. Under such agreements, market forces will set price for services.