Tax break for direct primary care could fragment insurance pools
H.R. 1026 — Primary Care Enhancement Act of 2025 · Filed by Lloyd Smucker (R-PA) · 8 cosponsors · Introduced Feb 5, 2025 · Referred to committee
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What it does
This bill amends the tax code to allow individuals to pay for direct primary care services (ongoing doctor visits with a fixed monthly fee, up to $150/month) using pre-tax health savings account (HSA) dollars, similar to how they use HSAs for other medical expenses. It excludes these arrangements from being classified as health insurance plans, and requires employers to report DPC fees on W-2 forms if the arrangement is employment-connected.
Why we flagged it
The bill's core function is to create a tax advantage (HSA-eligible treatment) for a specific healthcare delivery model (direct primary care). While framed as 'enhancement,' it is fundamentally a tax carve-out that benefits workers enrolled in DPC arrangements and the employers/DPC providers who offer them.
What the text implies
- By excluding DPC arrangements from health plan classification, the bill may allow DPC providers to operate outside insurance regulations, reducing consumer protections (e.g., no requirement for coverage of emergency care, no appeals process for denied services).
- The $150/month cap ($300 for family plans) is indexed to inflation only after 2026, creating a lag that may erode the real value of the tax benefit over time.
The full analysis lists 4 implications of this text.
Who stands to gain
direct primary care providers and DPC platforms; employers offering DPC plans (reduced health insurance costs); health insurance companies (if DPC enrollment reduces claims volume)