In October, the Trump administration proposed a new rule that would expand the ways employers can use health reimbursement arrangements (HRAs) to provide their employees with high-quality, low-cost health coverage. The United States Department of the Treasury estimates that once the new rules go into effect, 800,000 employers will take advantage of HRAs, which could affect coverage for more than 10 million employees.
HRAs are employer-funded accounts used to augment group health plans. Contributions made to HRA accounts are not taxed. Under Obama-era rules, HRAs can be used by employees to pay for qualifying health expenses, as determined by federal regulations and employers, in conjunction with a group health insurance plan.
Although HRAs currently offer some employees and their family members important benefits, they have been limited dramatically by federal agencies — a problem the Trump administration is now working to solve.
The administration could improve its proposed rule by clarifying that patients who pay for direct primary care (DPC) agreements would be eligible for reimbursement through their employer’s HRA. By classifying DPCs as a qualifying health-care expense, employees could use their HRAs to pay DPC costs, making it easier than ever for them to have access to more affordable primary care services.
DPCs are fixed-fee agreements made directly between primary care doctors and patients. Direct primary care agreements offer patients access to a defined set of health care services, including chronic disease treatment, check-ups and various health tests, at a flat, fixed monthly rate. At Epiphany Health, the direct primary care practice I founded in North Port, Fla., we charge only $65 per month for an adult membership and $25 for one child. A four-person family pays just $155 per month to receive primary care services, as well as have access to other typically more expensive care, like MRIs or blood tests, at a steeply discounted rate.
As the Docs 4 Patient Care Foundation, an organization I serve as president, noted in our substantive, eight-page comment invited by the administration, allowing the millions of people expected to access HRAs in the coming years to use these funds to pay for DPC agreements would be one of the most important improvements the Trump administration could make to the proposed rule. This would not only save money for millions of people, it would also reduce health care costs across the board and encourage those with HRAs to access routine care, save money and build up the funds in their HRA accounts.
Although most people don’t realize it, the traditional primary care model, which relies on third-party payments from health insurance companies and is closely governed by an army of government bureaucrats, is highly inefficient and expensive. Patients are often stuck waiting for extended periods to see doctors and then physicians typically only have a few minutes to speak with their patients because they are bogged down by miles of red tape and paperwork.
Because DPCs don’t involve health insurance companies, they limit expenses and paperwork, allowing many people to receive primary care at a much lower cost and freeing doctors to spend more time practicing medicine and less time worrying about health insurance paperwork and regulatory burdens.
Recognizing DPC memberships as reimbursable by HRAs would strip off a good portion of the red tape impeding this innovative health-care solution from saving patients hundreds of millions, perhaps even billions, of dollars. This would essentially liberate patients and employers to find and pay for affordable health-care that works. Patients, employers and even physicians would then have more freedom to engage each other directly.
Many suggest that the only way to provide all Americans with quality health insurance is to give greater power to the federal government, but nothing could be further from the truth. Government regulations are largely responsible for many of the problems we have today. What consumers and health-care providers really need is more freedom to make health-care decisions for themselves and that’s precisely what direct primary care accomplishes.
The administration should thus extend HRA tax protections to DPC patients, who have found a portal to perhaps the most efficient health-care model the United States has ever seen.
Lee Gross, M.D., is the president of the Docs 4 Patient Care Foundation and the founder of Epiphany Health Direct Primary Care.