Alaska

On 09/04/24 Alaska became the 33rd state to pass legislation defining clarifying that DPC practices are not insurance with HCS CSSB 45(L&C). Efforts began many years prior with House Bill 159 "An Act exempting certain health care agreements from regulation as insurance" which was proposed in 2016 (my thoughts about this legislation are included below).  There are multiple DPC practices within Alaska's borders. When designing your contract be sure to review Alaska Insurance Code, most importantly AS 21.12.050 (Insurance language) and AS 21.86.900 (Health Maintenance Organization language).  The Alaska State Medical Board has issued brief guidelines on physician dispensing.

Sec. 21.12.050. Health and health care insurance defined.
   (a) Health insurance is insurance of human beings (1) against bodily injury, disablement, or death by accident or accidental means; (2) against the resulting expenses of the injury, disablement, or death; (3) against disablement or expense resulting from sickness or childbirth; (4) against expense incurred in prevention of sickness; (5) for dental care; and (6) including every insurance that applies to injury, disablement, or death. Transaction of health insurance includes disability insurance and stop-loss insurance but does not include workers' compensation insurance. Health care insurance described in (b) of this section is a type of health insurance under this subsection.
   (b) Health care insurance means that part of health insurance that provides, delivers, arranges for, pays for, or reimburses any of the costs of medical care.
   (c) In this section, "stop-loss insurance" means insurance purchased by a self-insured employer to cover benefits the employer incurs in excess of a preset limit.

Sec. 21.86.900 Definitions
(10) "health maintenance organization" means a person that undertakes to provide or arrange for basic health care services to enrollees on a prepaid basis;

(3) "basic health care services" means emergency care, inpatient hospital and physician care, and outpatient medical services, but does not include mental health services or services for alcohol or drug abuse;

Alaska’s “Direct Health Care Agreements” (Not Insurance) Law

Here is a link to the language from Alaska HCS CSSB 45(L&C) passed in 2024. Unfortunately this is a misguided piece of legislation. Those that drafted and passed the legislation demonstrate a clear misunderstanding of direct primary care both in terms of the much better legislation that has already been passed in 30+ states and federal law regarding Medicare and the ability to privately contract for covered services after opting out. Since the Alaska page of the bill displays in a way that is tougher to read I took the language and turned it into a PDF and highlighted the problematic sections.

In Alaska DPC physicians are required to either accept Medicare patients into their DPC practice or if their practice is closed to Medicare patients then the DPC practice must be able to prove that 20% or more of the patients in the practice either have Medicare or have no health insurance at all. Medicare does not pay for DPC services. This means that DPC physicians either have to 1) see Medicare patients for free, 2) opt out so that they can private contract with Medicare patients and then continue to let them join the practice even if they are full if they don’t hit the 20% uninsured/Medicare target, or 3) run a hybrid practice where DPC patients get great care and Medicare patients are forced in to a sad, inefficient fee for service traditional model that may well bankrupt the practice. This requirement is foolish. It does not consider federal law. It has NOTHING to do with clarifying what activities do or do not bear risk - which is the ENTIRE POINT of defining DPC as outside of insurance.

If I lived in Alaska and wanted to be a DPC physician I would likely move elsewhere. For those that choose to stay and want to practice in a DPC practice, you should try to find a location with a high number of uninsured patients to meet this 20% target. Meeting that target with Medicare patients could be challenging as Medicare patients are often less price sensitive than others with high deductible plans. I would hope that this law would not survive a constitutionality argument, but you never know what a court might decide.

Other thoughts: Section (l) is in clear conflict with section (g). You are limited to one membership price change every year and there must be at least 45 days’ notice. All monthly fees must be charged at the end of the month of service. The insurance commissioner still has broad power to “adopt regulations regulating direct health care agreements that are consistent with this section.”

Here are some earlier thoughts about the original 2016 proposed legislation (HB 159):

HB 159 does not actually use and appropriately define the term "Direct Primary Care."  (Note the easy to understand three part definition.)  For some odd reason there is fear that using this term would exclude outpatient based specialists from practicing in this manner - this is not the case.  We should ditch the phrase "routine" in section K(1) and replace it a "direct primary care or similar medical services arrangement." 
 
In section K(5) we should strike the phrase "specific routine."  Similarly at the end of the legislation we should strike the entire section (L)(3) that seeks to define "routine health care services."  Simply require that the DPC contract specify the health care services that it covers.  Attempting to give it an adjective such as "routine" will inevitably back you into a corner where you make some physicians narrow their scope unnecessarily and obligate others to expand it uncomfortably.  Remember that we should anticipate some level of scope restrictions to come on the federal side (when the IRS has to interpret legislation designed to make DPC HSA deductible, then by necessity they will need to decide which DPC services "count").
 
In section K(9) - this was written as an attempt to prohibit fee for noncovered service practices (aka concierge) from double dipping and claiming to be DPC.  A wise concept, but the problem is that the language was poorly drafted.  As written this section causes collateral damage.  If read literally, it could prohibit a DPC practice from billing an "other person" (such as an individual's employer) for the services provided under the agreement.  If we appropriately defined DPC using the three part definition listed above then sections like this are unnecessary.