Congress Should Remove the Barriers to Direct Primary Care

Congress recently made it easier for Americans to pay their doctors directly. But federal rules still prevent their health insurance from counting those payments toward a patient's deductible or out-of-pocket maximum.

Direct Primary Care (DPC) offers a simple alternative to conventional primary-care: patients pay a fixed monthly fee directly to their physician in exchange for routine primary-care services, often without insurance claims or billing departments. For patients with high-deductible health plans (HDHP), the arrangement could be particularly useful, pairing routine primary care with insurance for larger, less predictable medical expenses.

Until this year, federal Health Savings Account (HSA) rules stood in the way of such a pairing. To contribute to an HSA, patients generally must be enrolled in a qualifying high-deductible health plan and cannot have another health plan that provides medical benefits before the deductible is met. Because DPC arrangements provide primary-care services in exchange for a monthly fee, they could be treated as disqualifying additional health coverage, potentially making participants ineligible to contribute to an HSA. Congress fixed that problem. Effective in 2026, qualifying DPC arrangements are not treated as disqualifying health plans for HSA purposes, and patients may use HSA funds to pay qualifying DPC fees.

Congress fixed the HSA eligibility problem, but it left a separate issue unresolved: how a high-deductible health plan may treat the money patients spend on DPC. Under Treasury and IRS guidance, an HSA-qualified HDHP generally cannot count a patient's DPC membership fees toward either the annual deductible or out-of-pocket maximum. In other words, patients may now participate in DPC without losing HSA eligibility and may use HSA funds to pay qualifying DPC fees, but their health plan still cannot recognize those payments when calculating how much they have spent toward their deductible.

Just as with many other aspects of healthcare spending Washington now allows a patient to use tax-advantaged savings to spend $1,200 a year on primary care but requires the patient’s health plan to act as though that $1,200 in healthcare spending never occurred. Congress stopped penalizing patients for joining DPC. It should finish the job by allowing insurers to recognize that choice.

There is no need for a new regulatory mandate. Congress should simply give patients and insurers more freedom to design plans around DPC. It should make sure that an HSA-qualified HDHP does not lose its status merely because an insurer voluntarily chooses to count patient-paid DPC membership fees toward the plan’s deductible or out-of-pocket maximum, as the current rules stipulate. Insurers should be free to offer that feature, and patients should be free to decide whether they value it when choosing a health plan.

DPC can give patients something conventional healthcare often hides, a predictable price for routine care. A monthly membership can provide access to primary-care visits without generating a separate insurance claim every time the patient sees a physician. For patients with HDHPs, the pairing is intuitive. DPC handles frequent, relatively predictable primary-care needs; insurance protects against larger, less predictable medical expenses. That more closely resembles the traditional economic purpose of insurance rather than running every routine medical interaction through a middleman.

Once the federal restriction is removed insurers would be free to design products around the growing number of DPC practices.

Congress does not need to determine whether DPC is better than conventional primary care. Consumers can do that.

Congress is not the only one who can help. States also determine how easy DPC can coexist with health plans. Florida and Maine, for example, have clarified that qualifying DPC arrangements are not insurance. This ensures DPC practitioners are treated as healthcare providers rather than health plans merely because they charge fixed membership fees.

At the same time, states should eliminate rules that explicitly prevent voluntary integration with insurance. While Maine gets the first part right, it also bars DPC membership fees from being reimbursed by insurance or applied toward an insurance deductible. 

Lawmakers correctly recognized that paying a primary-care doctor directly should not cost Americans access to HSAs. Now policymakers should remove the remaining barriers that prevents insurers from building on that reform and incorporating DPC into routine health coverage. Americans should be able to combine direct payment for routine primary care with insurance for larger medical risks, and insurers should be free to offer products that recognize what those patients actually spend.

Congress and state legislatures just need to finish the job.

Justin Leventhal is a senior policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.