January 28, 2021

Cassidy, Shaheen, Scott, Kelly Introduce Bill to Allow HSAs to Be Used for Direct Primary Care

WASHINGTON – U.S. Senators Bill Cassidy, M.D. (R-LA), Jeanne Shaheen (D-NH), Tim Scott (R-SC) and Mark Kelly (D-AZ) today introduced bipartisan legislation to lower the cost of health care and expand patients’ access to their primary care providers.

Direct Primary Care (DPC) encourages patients to develop personal relationships with their primary care physician.  DPC focuses on prevention and primary care, relying less on specialist and hospital referrals. It is a growing model used by thousands of practices in almost every state.  With DPC, care is delivered in any setting; using virtual care, with telemedicine or office visits beyond normal business hours. The pandemic has shown the importance of this flexibility. DPC allows patients access to primary care right in their living room or with visits in person when testing or hands-on treatment is needed.  DPC provides for all this with no additional fees and without burdening ERs and clinics which are needed to treat the most acute cases. 

DPC agreements replace copays and deductibles with flat, affordable monthly fees. A recent Milliman study found that employers who pay for DPC as a part of a health benefit plan have a great return on their investment.  Data from employers has shown that DPC can reduce the total cost of care by as much as 20% versus a regular health plan.  But employers can’t provide this benefit to anyone with a health savings accounts (HSAs) paired with high-deductible health plans (HDHP).

Current tax law makes DPC incompatible with HSA/HDHP plans because the IRS defines DPC as insurance.  Over thirty states have passed laws and regulations to clarify that DPC is not insurance, but a medical service.  The Affordable Care Act even recognizes DPC as an advanced payment model outside insurance. The senators’ bill, the Primary Care Enhancement Act, clarifies the tax code that a DPC agreement does not make a patient ineligible to contribute to an HSA, and that and that pre-tax HSA funds may be used to pay DPC fees. 

“This bill allows patients to use their money for the doctor they want. By using health savings accounts and direct primary care, patients have the power to take control of their families’ health care decisions in the way that works best for them,” said Dr. Cassidy.

“As communities in New Hampshire and across the country face down this deadly pandemic, Congress must be doing everything in its power to make health care as affordable and accessible as possible,” said Senator Shaheen. “I’m glad to work with Senator Cassidy and this bipartisan group to expand Direct Primary Care models so that families have more flexibility in accessing primary care through use of their Health Savings Accounts. Helping Granite Staters save money while improving the quality of health care will always be a top priority of mine, and I appreciate the bipartisan spirit to pursue this commonsense effort to help working families.”

“The coronavirus pandemic has highlighted the urgent need to rethink health care policy,” said Senator Scott.“Commonsense fixes, like the Primary Care Enhancement Act, would correct an outdated provision in the U.S. tax code and provide 23 million Americans with affordable, high-quality health care as we recover from the pandemic. I am proud to introduce this bill with my colleagues as we work to find bipartisan solutions to combatting the pandemic.”

“For more and more Arizonans, direct primary care is their preferred option of getting quality health care, and this common sense fix would allow many of them to use their existing benefits to make that care more affordable. Especially during this pandemic, it’s critical to continue working on solutions to lower the cost of health care for Arizona families,” said Senator Kelly.