Public Policy
February 9, 2021

How the Primary Care Enhancement Act Could Impact HSAs

Health insurance is a hot topic as we move through the first few months of a new administration in the White House. Between COVID-19 and the general state of the healthcare industry, Americans are acutely aware of costly coverage and the potential for anything to happen—and they're looking for new options. 

Direct Primary Care (DPC) plans are on the rise as more and more people are looking for less expensive ways to obtain coverage. Lawmakers noticed the trend and launched a bipartisan bill presented at the end of January, hoping to expand DPC choices and how DPC costs are covered.

What is Direct Primary Care?

Not to be confused with your primary care provider (PCP), Direct Primary Care (DPC) is a type of billing arrangement that ensures people have access to the undivided attention of a primary care physician. For a low (compared to full-coverage health insurance) monthly price, you can visit your doctor for regular PCP services, including lab work, and not worry about co-pays, deductibles, or co-insurance fees.

Sounds like a great deal, right? In a lot of cases, yes! However, it doesn't provide any sort of coverage for catastrophic events and accidents and can land those without coverage in a lot of debt. To ensure coverage in the event of a medical emergency, many people choose to enroll in High-deductible Health Plans with HSAs because of the low monthly premium and flexibility of a health savings account. 

The catch (until now) is that paying for DPC makes someone ineligible to contribute to an HSA while on an HDHP, drastically decreasing the usefulness of a high-deductible plan.

What is the new bill proposing?

Fueled by the many horror stories of people encountering astronomical costs after battling COVID-19, U.S. Senator Jeanne Shaheen (D-NH) joined Republican and Democrat counterparts to introduce legislation to lower healthcare costs and expand access to PCPs through Direct Primary Care. Not only will it expand access, but it will ensure people are eligible for HSAs and can use those funds to pay for monthly DPC costs—a huge step in making healthcare more affordable!

In fancy government terms: the bill specifically clarifies that enrolling in a DPC agreement does not make someone ineligible to contribute to and use their HSA funds to cover DPC fees.

What does this mean for me and my HSA?

All good things! If you've been interested in a DPC plan but didn't want to lose your HSA eligibility, or if you're in a DPC agreement and wanted access to an HDHP + HSA, this bill passing could be the answer you've been looking for! Beyond merely selecting one or the other (DPC or HSA), you can use your HSA to pay for DPC and provide the peace of mind of having coverage in the event something unexpected happens.

What happens if the bill doesn't pass?

If the bill doesn't make it, you will not be able to use your HSA for DPC agreements depending on where you live. Over 30 states have defined Direct Primary Care as a medical service and not an insurance plan, making anyone utilizing DPC eligible to make HSA contributions and use those funds. There's plenty of fine print and varying policies, so be sure to check out what your state has laid out.

All in all, this bill is a step in the right direction in expanding HSA access, making healthcare more affordable, and giving power over healthcare back to individuals. 

We'll be sure to keep an ear to the ground on the topic and let all of our readers and users know what's going on!


For more information on Direct Primary Care and its history, visit this site.


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