Bills Before Congress Would Allow Use of Health Savings Accounts for Direct Primary Care Dues
Congress is considering legislation that would modify the federal tax code to allow the use of pretax health savings accounts (HSAs) to pay for the noninsurance payment model of direct primary care (DPCs).
HSAs are a type of savings account that allows people to set aside money before taxes to pay for qualified medical expenses such as deductibles, copayments, and coinsurance. Some in Congress want to extend those qualified medical expenses to include dues that members pay to direct primary care practices. Because DPCs don’t accept insurance or payment from third-party payers, they can offer unlimited primary care for typically less than $100 per month.
Bills Would Broaden HSAs
Sen. Marco Rubio (R-FL) introduced S. 12, the Health Savings Act of 2019. Cosponsored by Sen. Lisa Murkowski (R-AK), the legislation would expand what qualifies as a valid expense for the use of HSAs. Under current law, the Internal Revenue Service handles DPC fees differently from insurance premiums and copays, which are qualified expenses.
In the House, Rep. Mike Gallagher (R-WI) introduced H.R. 603, the Health Savings Account Expansion Act of 2019. The legislation would increase the maximum allowed contribution amount, repeal the restriction on using HSAs for over-the-counter medications, remove the requirement that a person with an HSA also be enrolled in a high-deductible health insurance plan, and allow the use of HSAs to pay for health insurance premiums and direct primary care service arrangements.
Gallagher’s bill currently has 13 cosponsors, all Republicans, making it unclear how it will fare in the Democrat-led House.
Rep. Jeff Fortenberry (R-NE) has also introduced legislation on health savings accounts. H.R. 457, the Health Savings Account Act, would increase the maximum contribution limits for HSAs, allow the accounts to pay for fixed-fee primary care services and fitness center memberships. It also allows for a medical care tax deduction for fixed-fee primary care and services.
Game-Changer for DPC
Philip Eskew, a family physician, attorney, and founder of DPC Frontier, says the bills would make DPC much easier to access.
“Federal clarification that DPC fees are not health plan fees as defined by current law under 223(c) and are a qualified medical expense under 213(d) would allow patients and their employers to comfortably use DPC plans without any tax uncertainty through HSAs, HRAs, and FSAs,” said Eskew.
Eskew says those who oppose the bills are typically proponents of socialized medicine.
“Most of the opponents are confused,” Eskew said. “The small number that oppose DPC after understanding the concept generally seem to want to prohibit all forms of private medicine. DPC has broad, bipartisan support across red and blue states. Employers and patients benefit because now they can use pretax dollars to pay for DPC, just like most of their other health expenditures.”
HSAs allow market forces to help keep health care costs down, says Sarah Anderson, federal affairs manager at FreedomWorks.
“It's abundantly clear that there is widespread support for HSA expansion from all corners of the Senate Republican conference,” said Anderson. “While disagreements may continue in other areas of health care reform, Republican leadership should capitalize on this rare area of consensus and work to use HSAs as a means to put Americans in charge of their health care dollars and slow the growth of costs."
HSAs empower consumers, says Jonathan Bydlak, founder and president of the Coalition to Reduce Spending.
“HSAs are an essential piece of the puzzle that is solving the country's growing health care crisis and are a foil to the government-centric efforts like Medicare for All or even some Republican-led plans that would create new entitlements for paid family leave,” said Bydlak. “By contrast, expanding HSAs allows people to save for what they want, such as Rep. Andy Biggs' recently filed Freedom for Families Act, without burdening an already strained system with more mandates."s
HSAs allow consumers the opportunity to save pre-tax money in tax-free bearing accounts. Consumers, however, have had a hard time using the accounts for savings because they are restricted to certain high-cost expenses like insurance deductibles, premiums and insurance co-pays. A recent survey by the Kaiser Family Foundation and the L.A. Times finds less than 22 percent of those with incomes under $75,000 have more than $2,000 in an HSA.
Jake Grant (email@example.com)writes from Alexandria, Virginia.
U.S. Senator Marco Rubio (R- Florida) https://www.rubio.senate.gov/public/index.cfm/contact
U.S Representative Mike Gallegher (R-Wisconsin) https://fortenberry.house.gov/contact
U.S. Representative Jeff Fortenberry (R-Nebraska) https://fortenberry.house.gov/contact