Is Direct Primary Care Tax Deductible?

One of the questions we get asked at The Angel Plan in Red Oak, TX is whether direct primary care (DPC) membership fees are tax-deductible. At the moment, our membership fees are not considered as an eligible medical expense in most states and therefore do not qualify as deductibles. However, policymakers have been proposing regulations that may change how things work. Are you interested in a primary care plan that doesn’t involve a high deductible? Read on to learn more.

Is Direct Primary Care Tax Deductible?

Currently, DPC membership fees do not qualify as tax-deductible medical care expenses. But as of last June 2020, the Internal Revenue Service (IRS) has proposed new regulations regarding DPC arrangements and whether they qualify as eligible medical expenses. Once the proposed rules are finalized and implemented, DPC fees will then qualify as tax-deductible medical care expenses. These proposed regulations will also relieve many taxpayers who rely on health reimbursement arrangements (HRAs).

What Policymakers Are Now Considering

Policymakers are looking more closely at how DPC membership fees should be categorized. Nowadays, millions of American patients and employers turn to the DPC model for their primary care services. It’s no secret that DPC is a growing healthcare model, thanks to its affordability and accessibility. Recently proposed regulations can change how DPC membership fees impact health savings accounts (HSAs) as well as federal income tax deductions.

Primary Care as an Investment

By qualifying DPC membership fees as eligible medical expenses, proposed regulations will further encourage employers and health consumers to optimize their financial investment in primary care. Currently, to qualify for an HSA, health consumers must also be covered by a high deductible insurance plan. This rule can be burdensome to those considering a DPC membership plan who have HSA funds that can’t be used to pay for a DPC membership.

Redefining Eligible Medical Expenses

Many individuals find it challenging to deduct their DPC membership fees as eligible medical expenses. Currently, eligible medical care expenses are tax-deductible when they exceed 7.5% of the patient’s adjusted gross income. With the proposed regulations, DPC membership fees will finally be considered as tax-deductible medical expenses, providing relief for many taxpayers.

Why DPC Matters to Employers

Many employers and companies have started using DPC memberships to provide their employees access to immediate medical care. It’s no secret that the DPC model can reduce overall healthcare spending for employers because of affordable monthly fees and the high level of care. Because it offers many benefits to employees, businesses, and employers, DPC has been rising in popularity in recent years.

By allowing employers to use HRA funds to reimburse employees for DPC fees, the proposed regulations can help expand employers’ use of DPC membership plans. The new rules will offer excellent healthcare options to businesses offering HRA coverage. As a result, employees can experience high-quality primary care without worrying about the costs.

Who Still Needs a High Deductible Health Plan?

Many people choose to have a high-deductible health insurance plan (HDHP) to lower monthly premium costs and become eligible to contribute to an HSA. An HSA offers tax advantages and can offset some of the costs involved in an HDHP, such as copayments and high deductibles. Day-to-day medical expenses can be paid for through an HSA, while major unexpected medical expenses are covered by the HDHP.

When you have a DPC membership a well as an HDHP, primary health care services become more affordable. The HDHP can serve as a primary health plan that allows you to have an HSA, while your DPC membership can be a secondary health plan that offers cost-effective primary care services. Once policymakers finalize the proposed regulations, you’ll be able to contribute to an HSA and use it to settle your DPC membership fees.

The Importance of DPC as a Form of Medical Care

Direct primary care is truly patient-focused. It places importance on providing a positive experience to individuals who need quality healthcare. The DPC model is cost-effective, yet it highlights the importance of maximizing health benefits. Here are some of the reasons why we believe it’s essential to consider DPC fees as eligible medical expenses:

It Offers a Simple, Straightforward Experience

Many individuals feel anxious about healthcare expenses when there’s uncertainty about the final costs. As a result, many health issues are ignored or attended to at a much later time. Our direct primary care membership plans offer a simple, efficient process to solve this problem and make it easier to manage healthcare expenses.

First, our direct primary care model allows patients to pay their primary care physician directly through monthly fees. There’s no need to pay through an insurance provider and go through unnecessary paperwork. Second, the monthly fees are fixed, so there’s no need to worry about spending more when you need to see the doctor more often. This model proves beneficial to both patients and primary care providers, who can then focus on attending to patients instead of coding and billing.

It’s a Cost-Effective Healthcare Solution

We are all aware of how expensive some healthcare services can be. But thanks to direct primary care membership plans covering discounted labs, unlimited office visits, and other essential healthcare services, many individuals and employers can be more confident about their financial security.

The DPC model offers affordable monthly fees that cover the cost of all appointments, visits, and various healthcare services. Unlike high deductible insurance plans, DPC services don’t require significant out-of-pocket expenses. Additionally, membership fees remain the same no matter how often patients need to consult their primary care provider.

It Improves Patients’ Primary Care Experience

The DPC model not only offers a convenient payment option, but it also allows patients to develop better relationships with their primary care provider. Primary care physicians can provide medical advice and assistance over telemedicine, phone calls, texts, emails, and other methods that are not always possible under a typical health insurance plan. Patients can also expect longer visit times with their primary care provider.

Who Can Benefit From a Direct Primary Care Membership?

Rising healthcare costs make it challenging for many individuals to get the care they need. Therefore, redefining direct primary care as a tax-deductible expense will benefit many. Everyone can benefit from DPC membership plans, including employers, individuals, and businesses. Here are some of the ways the DPC model can transform the lives of many community members.

Senior Citizens

We all know that many senior citizens are subject to substantial out-of-pocket expenses for medical prescriptions. To address this concern, a DPC membership plan offers affordable, exceptional access to a primary care physician who can provide diagnosis and care for chronic conditions. It also makes a difference to senior citizens to feel that their doctor truly cares and is not trying to cut costs for health insurance.

Small Business Owners and Employees

When combined with an affordable health plan and an HSA, a DPC membership is an ideal option for small business owners who cannot afford expensive insurance plans. Small businesses can cut up to 30 percent of expenses on health insurance premiums. As a result, small business owners can have more funds to reinvest in the business or give back to valued employees as pay raises.

Individuals Without Employer Coverage

Some individuals prefer to have more control over where and how they access healthcare. Some others don’t require frequent medical attention. When preventive care is a top priority, direct primary care is the ideal option.

Additionally, those without employer coverage can take advantage of DPC membership plans that only require a set monthly fee for comprehensive primary care. This option prevents unpredictable spending towards premiums and deductibles. Individuals can be more confident about receiving the care they need without worrying about expensive costs.

Self-Insured Businesses

Are you a self-insured business? We can help you build unique health benefits for your employees. Our DPC membership plans are the perfect option for self-insured businesses that want to significantly reduce overall healthcare spending while focusing on employees’ well-being and satisfaction with their health benefits.

Taking Primary Care to the Next Level

Many businesses, employers, and individuals choose the DPC model because of the personalized yet affordable health care that comes with it. If you prioritize positive experiences and want employees to develop strong relationships with a primary care provider, then a DPC membership plan can be the perfect option for you. If valuable care is what you need, visit The Angel Plan in Red Oak, TX to learn about your options. Our team is committed to providing you with exceptional service and quality care.