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Trump Administration Expands Health Savings Accounts

This week, JLF’s Jordan Roberts published a research brief on a huge potential change in health care. According to Roberts:

President Trump signed the Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First in late June of this year.  It allows a patient to use tax-advantaged health savings account dollars for direct primary care.  The executive order has significant implications for health care access and spending.

Roberts explains:

Health savings accounts (HSA) are a tax-advantaged savings account that must be exclusively used for qualified health expenses. To qualify for an HSA, an individual must be enrolled in a high-deductible health plan. Both the employer and employee can contribute to this account on a pre-tax basis. Direct primary care (DPC) is a type of primary care arrangement that does not utilize insurance. Instead, a patient or family get around-the-clock access to the primary care doctor for a small monthly fee… usually between $50 and $100 depending on age and family size.

Money from HSA accounts, as things currently stand, cannot be used for direct primary care. Roberts writes:

Under the qualified health expense section of the tax code that delineates the services HSA dollars can be used for, a DPC membership fee is not included. Instead, DPC membership fees are considered a “second health care plan” rather than a legitimate expense for which to use HSA dollars. In this way, the government prohibited consumers from using their own money to purchase affordable primary care from a doctor they chose. 

These direct primary care services could be an affordable and appealing health care solution for many Americans. Roberts explains:

With no insurance paperwork to fill out, doctors can spend more time with patients to help with actual treatment and disease management… [And] pairing an HSA with a DPC membership and a high-deductible health plan could provide a significantly more affordable health coverage arrangement than typical commercial insurance plans provide.

The executive order gives the Secretary of the Treasury 180 days to draft regulations on this issue.

Read the full brief here. Learn more about direct primary care here.

 

Brenee Goforth / Marketing and Communications Associate

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