The Origins of Liberty Direct:
In 2015, one of my personal friends and a man whom I admire, Tom Blue, came across a book written by an early founder of the Healthshare concept. Tom was already deeply involved with two areas of healthcare which I am personally passionate about: Direct Primary Care (DPC) and Functional Medicine (FxM). Upon learning about the Healthshare model, Tom saw an opportunity to transform our dysfunctional healthcare system on a much wider scale by combining DPC (which covers primary care + urgent care at a fraction of the usual cost, and with highly personalized service) with the Healthshare model (which covers hospitalizations, surgeries, and maternity care at a fraction of the usual cost) all with a focus on “source-cause” medicine rather than the “pill for every ill” approach. How exciting!
What followed and evolved throughout 2015-16, was nothing less than historic. A new concept, a new model, and a heroic effort to help address various well-noted failures of our healthcare system including: lack of pricing transparency, exorbitant and constantly increasing costs, and numerous “perverse incentives” within the healthcare infrastructure.
This new project was called Liberty Direct, an offshoot of the well-established Liberty HealthShare program which was launched within the Mennonite community in Ohio in the 1980s. It wasn’t perfect. It wasn’t for everyone. It didn’t solve every single problem in our healthcare system, nor did it’s founders ever suggest that it would. But it presented a viable alternative for many tens of thousands of patients nationwide for whom the conventional healthcare system mediated by the “Affordable Care Act” (aka Obamacare) had failed to live up to its name. This included my own family, and thousands of other families who faced continuous increases in healthcare premiums, higher and higher deductibles, with no end in sight.
As a cornerstone to it’s approach in providing optimal healthcare at enormously discounted rates, Liberty Direct sought to partner with certain DPC practices nationwide (so-called “premier practices”) and provided additionally discounted rates to members of those practices. Cloud Medical is one of those premier practices. Liberty understood that partnering with practices which offered 24/7 service, unlimited visits with no copays, and unrestricted cell/text/email access to each patient’s personal physician would significantly reduce healthcare costs. Accomplished by decreasing unnecessary ER visits, optimizing early intervention and preventative care, they were proven right! DPC data indicates a 20-30% overall systemic cost reduction in contrast to conventional insurance-based practices. So when purchasing memberships to Cloud Medical and Liberty Direct together as a package, patients were offered bundled discounts of $60, $80, and $100 to individuals, couples, and families respectively.
It is important to point out that from the outset, Liberty HealthShare founders were not (and are not) motivated by money. From every indication that I have personally observed, their intentions have nothing to do with generating profits for executives, administrators, or shareholders. The money collected from patient-members goes into the collective pot—and stays in the pot—until one of their members needs help paying steep bills for major medical conditions such as hospitalizations, surgeries, specialty care, maternity care, etc. While it might seem that this is how the insurance industry works in general, in fact it couldn’t be more different. Just read this article if you want a taste of what I mean (Cigna Retirement Bonuses). In contrast, Liberty HealthShare (like other HealthShare programs) is a non-profit enterprise. They don’t need to do what they do for purposes of staying in business and making shareholders happy. They’re not on a mission to grow and scale and make money and enroll the maximum amount of “subscribers”. Their intent is to provide what they believe to be a needed service which they offer for folks who recognize their purpose and share their basic values. This mission is very different from conventional insurance.
Before explaining my own understanding and impressions of how Liberty works and why I believe that our patients should be informed about the HealthShare options and consider using it for their own major medical needs, I must clearly state that Cloud Medical is not in any way a representative of Liberty Direct, Liberty HealthShare, nor any other faith-based organization whatsoever. Neither myself nor Cloud Medical manages or administers any of Liberty’s programs. While I resonate with many of the Liberty HealthShare religious and philosophical tenets, we at Cloud Medical hold more liberal views on such things as definitions of “family”, etc. But since my DPC practice, Cloud Medical, alone does not cover major medical expenses nor offer a tax exemption from ACA penalties, I feel that it is one of my jobs to educate my patients about various options and alternatives for obtaining both a world-class healthcare program and a cost-effective approach to obtaining it. I support my patients in every possible way I can, and I feel that Liberty is a potentially valuable option for the handling of major medical costs for some, but certainly not all of our patients.
So what are some key details to know about Liberty?
First and foremost, Liberty HealthShare (LHS) is not an insurance company. LHS and other HealthShare ministries are “insurance alternatives”. As such, they are not regulated by any state’s Division of Insurance, nor are they beholden to various insurance industry legislative policies. Another important distinction is that they do not “meet” the requirements of the ACA—rather their patient-members rely on legal statutes that were specifically created to provide an IRS exemption to ACA tax penalties. This means that members of Liberty HealthShare plans avoid the IRS penalty for not subscribing to a insurance industry based ACA-approved health insurance plan. This is an easily selected option on IRS form 8965.
Second, this exemption is based upon rigorously-defined religious critieria. All HealthShare programs (including Good Samaritan, MediShare, and other faith-based “health care ministries”) must utilize specific religious language in its membership documents and agreements in order to meet the ACA exemption requirements. While most of these programs require prospective enrollees to strictly observe and adhere to various religious tenets (e.g. many of them require applicants to obtain a letter from a qualified pastor verifying “good standing” in their particular faith-based community), Liberty is the most inclusive and openly non-denominational HealthShare plan available. Their application only requires agreeing to the following statement: “I believe God wants me to be healthy”, and allows people of all faiths to willingly participate in their program. Nonetheless, their religious underpinnings are the legal basis of their tax-exempt status and ACA exemption.
Third, Liberty is only interested in enrolling individuals, families, and organizations who clearly understand the philosophy and, in their words, the “mentality” of HealthSharing. This is extremely important. Liberty HealthShare offers an alternative model for getting help with payment of major medical expenses which are still a leading cause of bankruptcy in the US. LHS devised this concept and offers it as a option, in the spirit of service rather than profit. They welcome folks who understand and acknowledge this, and quite frankly, who appreciate it. The basis of their mission is to serve those who are genuinely interested in “sharing in the burden of others” in the spirit of community. The fact that Liberty offers what may be thought of as “protection” from major medical expenses at a fraction of that of any other option on the healthcare exchange is of secondary importance. Most primary is their goal of building a system that is “voluntary and good”. This is based upon a stewardship philosophy, distinctly different from the way in which many patients view their health insurance plan. It is not uncommon for doctors to hear patients with conventional insurance comment upon meeting their deductible for the year that they are ready to use their health plan “like an ATM to get the most out of their premiums”. While I can sympathize with this point of view given how much most of us spend on healthcare premiums each month, this is antithetical to Liberty’s worldview.
Liberty charges very little, siphons almost nothing off for admin or executive fees (which are kept to a minimum), and offers its patient-members broad support without any kind of restrictive “network”. This means that you can get advanced care anywhere you like (although you are expected to use your DPC practice of choice for general primary care and urgent care), and stays with you in any state in the US, and any country in the world! But it also means that you are expected to play an active role in keeping yourself healthy and not running up healthcare bills just because you met your annual deductible. It works because the members respect and honor the concept of “sharing the burden of others”, and happily contribute toward that goal.
How is Liberty different than regular insurance?
There are several distinctions which differ from traditional insurance plans and which are important to understand,
1.) Liberty reserves the right to decline membership to individuals for various reasons, including on the basis of pre-exisiting conditions.
2.) Liberty does not reimburse for expenses related to pre-existing conditions for the first year of membership, and only up to $25,000 during the second year, and up to $50,000 during the third year. After that time period, one becomes eligible for the full $1 million per incident of “sharing”. Meaning that up to $1 million of expenses will be paid by the Liberty community from the collective pot per major healthcare incident including hospitalizations, surgeries, inpatient and outpatient treatments, maternity care, etc.
3.) Liberty does not cover for health conditions related to high-risk behaviors. This includes smoking related diseases including cancers, alcoholism and drug abuse-related conditions, as well as certain sports such as sky diving, auto racing, etc. They encourage participation in athletics including skiing, cycling, hiking, running, etc. but (to my dismay) they do not allow the sharing of costs of rock-climbing or technical mountaineering-related injuries. For individuals who enjoy more “extreme” sports, obtaining additional coverage with a low-cost indemnity plan (such as Aflac) is recommended to avoid financial exposure.
4.) Liberty does not cover inpatient mental health hospitalizations, drug and alcohol rehab facilities, etc. (However at Cloud Medical we are experienced and equipped to handle a wide array of outpatient mental health conditions including insomnia, ADD, depression, and anxiety disorders. Of course those services are included at no additional fee to our Cloud members.)
What changes are scheduled to take place with Liberty in 2017?
In February of 2017, a transition within the Liberty leadership team which began in December of 2016 will be complete. Liberty Direct operations will return to the management of Liberty HealthShare. As part of this process, important changes in how Liberty members are reimbursed by Liberty will also take place.
- Beginning February 1, Liberty members must submit a bill and request that the payment made to Cloud Medical be treated as a ‘shared medical expense’, the same as any other sharable medical cost. Liberty will then pay the member what was previously paid directly to Cloud Medical. Currently this happens automatically, as Liberty pays your discount for DPC Service/Cloud Medical directly, and that payment is then deducted from your Cloud membership fee. Is this change a bit of a pain? Yes it is! We at Cloud would much prefer the simpler method of just discounting the total amount billed to you. But this is not our decision to make, and Liberty has decided to do it this way instead.
- As of June 1, 2017, Liberty will be decreasing their contribution toward the Cloud + Liberty bundled discount. This means you will paying slightly more for the Cloud Medical + Liberty HealthShare combined package. Please note: Cloud Medical is NOT raising your rate. The reimbursement amount from Liberty is being reduced.
While we are not thrilled with this unanticipated change in Liberty’s policies, we still fully support their mission and share the vision of changing healthcare for the better. I believe that this is still far and away the best value available in the healthcare industry. That said, we understand that this is inconvenient, and nobody likes to pay more for anything. We stand ready to assist in any way possible to make this transition as smooth as possible. We hope it will not result in too much of an inconvenience for you.
As always, it is my honor and pleasure to be your health partner and advocate. Let’s make 2017 a great and healthy year together!
Dr. David Tusek
