On January 24, 2019, President Donald Trump issued an executive order that calls for an increase in health care price and quality transparency. The main goal is to help patients make more informed choices by ensuring that they know the price and quality of “shoppable” health care goods and services in advance so they can make more meaningful comparisons up front. With improved awareness of actual out-of-pocket costs based on the rates negotiated between insurance companies and providers, patients can also better avoid unexpected medical bills.
The Potential Impact on Direct Primary Care
The President’s executive order also addresses direct primary care (DPC), in which a member pays a set monthly fee in exchange for unlimited access to a primary care physician. The Internal Revenue Service (IRS) has taken the view that DPC membership fees do not qualify as recognized medical expenses. Thus, under current tax law, DPC members cannot use tax-exempt funds held in a Health Savings Account (HSA) to pay their DPC membership fees (although they can use HSA funds to pay for incidental charges, such as the costs associated with lab tests and medical images). A key objective of the President’s executive order is to make DPC membership fees eligible for HSA reimbursement.
While this is good news for DPC members, it’s important to note that an executive order is not an immediate change in laws or regulations. Rather, it is a directive for various agencies to draft and publish proposed new rules, then finalize those rules based on public comments. So, although a change is clearly on the horizon, the entire process could take months or even years before going into effect.
Is Direct Primary Care Right for You?
When deciding whether DPC is right for you, the tax treatment of your membership fees is just one factor among many that you might consider. If you’d like to learn more about DPC, contact Optimum Direct Care today. We’re proud to take primary health care to the next level, providing our patients with value that extends beyond the tax savings on qualified health care expenses. We’ll be pleased to answer your questions and help you make the right choice for you.