31-07-2025
GOP tax-spending bill sets path for direct primary care boost
Providers of "direct primary care" who charge patients a monthly fee for unlimited visits and workups are poised to become big winners from the new Republican tax-and-spending law.
Why it matters: The law for the first time allows patients to tap their health savings accounts for the concierge-like primary care arrangements, and lets employers extend both benefits, in the belief they're more efficient than the traditional fee-for-service system.
The change aligns with a Project 2025 goal to promote more personalized and flexible direct primary care, and a GOP penchant for expanding the use of high-deductible health plans and their tax-advantaged savings accounts.
The legislation"takes an impediment out of the way" for employers who want to improve their employees' primary care, said Jim Winkler, chief strategy officer for the Business Group on Health.
"It certainly is helpful at a time when employers are very interested in that space."
Driving the news: Starting next year, people who have a high-deductible plan and direct primary care membership through their workplace can contribute to an HSA.
The ability to invest pre-tax dollars and spend them later on eligible health care expenses can lessen the burden of a large insurance deductible.
About 21% of U.S. workers with employer-sponsored health insurance were enrolled in HSA-eligible high-deductible plans in 2024, according to KFF.
Until now, the tax code disqualified people who use concierge care from contributing to an HSA. Employers are among those who advocated for the change, which had some bipartisan support, Winkler said.
The bill also makes direct primary care membership fees an allowable HSA expense for people who don't get a subscription through their employer.
The change opens the direct primary care market to more employers, said Rebecca Springer, director of market development at health care investment bank Bailey and Co.
The share of employers offering direct primary care subscriptions grew a staggering 800% between 2017 and 2022, according to a report from direct care software platform Hint Health. Still, a relatively small number of employers offer direct primary care benefits.
"It's certainly a tailwind for direct primary care," she added.
Yes, but: There are still underlying challenges, tempering expectations of a big boost for the sector, she noted.
Direct primary care is still a relatively small segment of health care, and it can be difficult to scale. It's also not very integrated with the broader health system.
"What makes a direct primary care model really good for a patient is that they get to spend more time with the physician," Winkler said. Doctors also like the smaller patient loads.
"Finding more primary care physicians — and we have a scarcity of that in our country — will be a challenge as this model grows," he said. "It's true of any version of advanced primary care that's rooted in how that physician spend more time with the patient."
What we're watching: Whether more physicians start or join concierge care practices going forward.
Many have been interested but hesitant to make the leap because until now, there hasn't been a clear financial incentive to help patients afford the services, which can cost up to $150 per month — on top of insurance premiums and specialist copays — for an individual under the new law, said Shawn Martin, CEO of the American Academy of Family Physicians.
"Now that that exists, I think you'll see a lot more interest in the model," he said.
AAFP's 2024 survey of doctors providing direct primary care found that 94% were satisfied with their overall practice, compared with 57% of doctors not practicing direct primary care.
