The Primary Care Enhancement Act (PCEA) would allow money in tax-free health savings accounts to be used to pay for subscription-based health care, such as direct primary care (DPC), which links providers and patients with care agreements based on a monthly fee rather than traditional third-party health insurance.
Currently, federal rules prevent Americans from using money they put in a health savings account (HSA) to pay for DPC because the Internal Revenue Service classifies DPC agreements as a form of insurance, and HSA funds cannot be used to pay for health insurance. Introduced in both the U.S. House and Senate, the PCEA is certainly gathering momentum.
It doesn’t make sense that patients can use HSA funds for things like crutches and birth control but not for primary care visits. Americans don’t use insurance for new tires or wiper blades on their car, but they do use it for major collisions and other catastrophic events. That’s the basic idea behind DPC.
Your provider agrees to treat you for basic primary care, including telehealth visits, in-office treatments, and most lab tests, for a relatively low monthly fee. The cost for DPC is significantly less than traditional health insurance (DPC patients typically spend less than $100 per person per month ) while patients also have a traditional insurance plan to cover major illnesses and injuries. “Direct Primary Care (DPC) is an innovative monthly membership-based payment plan that helps reduce health care costs while providing high-quality primary care to patients,” explains Rep. Claudia Tenney (R-NY). “DPC is a popular option for upstate New Yorkers and promotes a strong and trusting relationship with health care providers.”
Because DPC allows providers to spend less time dealing with insurance companies, they are able to spend more time with patients. In fact, DPC typically saves patients 20 percent on health care costs while providing higher patient satisfaction.
The Association of American Medical Colleges predicts a doctor shortage of up to 124,000 physicians by 2034. Allowing patients to opt out of traditional health insurance for routine medical care will promote choice and alleviate this daunting shortage. Some states, like Texas, are looking at ways to cover the gap by expanding DPC to also include appointments with physician assistants.
Critics of the DPC/HSA model point out that patients will go without care unless they are forced into a one-size-fits-all plan, like those offered under Obamacare. However, that’s exactly what is happening right now in the fee-for-service marketplace. Forcing everyone into a Cadillac plan has driven up deductibles and rationed care. Fully 44 percent of Americans worry about being able to afford care within their deductible. Considering that 100 million Americans are now on Medicaid, well over half of everyone who gets care through their job, the individual market, or through Obamacare exchanges are worried they can’t afford to pay for basic care before their deductible is reached.
Direct Primary Care and Health Savings Accounts can work together to empower patients and drive down health care costs while improving access because the wisest health care spending decisions are always made closest to the point of care.
Matt Dean ([email protected]) is a health care policy advisor with The Heartland Institute.