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How HSA reform could benefit direct care physicians

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Many people choose a high-deductible health insurance plan to reduce their monthly premium cost. Those who do so are eligible to participate in a Health Savings Account (HSA) that may help offset some of the added expenses of the high-deductible plan, including deductibles, copayments, coinsurance, and certain other expenses. HSAs are also attractive because the money is set aside on a pre-tax basis.

Currently, the HSA is only available to people who have a high-deductible health plan, either employer-sponsored or obtained through the Marketplace, with a deductible of at least $1350 for an individual or $2700 for a family. Those who opt to participate in a Direct Care program are not eligible for the HSA program.

HSA reform could be on the horizon, however. A proposed bill, HR 6199, passed the House of Representatives in July 2018 and is now in the hands of the Senate. The bill would allow Direct Care patients to participate in an HSA and use those funds to pay their membership fees.

The Direct Care physician bills patients for a membership on a monthly basis, rather than billing for each visit or service provided. Patients are able to take advantage of basic primary care services as well as some treatment for illness or injury as part of their membership. Direct Care patients sometimes do secure high-deductible insurance plans for catastrophic coverage but are still not eligible for the HSA program since they participate in the Direct Care program.

The number of Direct Care practices is increasing as more patients realize the benefits and cost savings involved. To date, though, the inability to participate in an HSA or use HSA funds for DPC membership fees has been a challenge for both Direct Care patients and providers. If HR 6199 is passed, the amendments specified in Sec. 3. Treatment of Direct Primary Care Service Arrangements, will apply “to months beginning after December 31, 2018, in taxable years ending after such date.”