ALERT: Tell IRS Not to Conflate Coverage with Care

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Dear AAPS Members and Friends,

Back in June the Internal Revenue Service proposed long-anticipated regulations, stemming from Sec. 6 of a June 2019 Executive Order signed by President Trump.  In large part the new rules make good changes that expand options for patients.  For instance they allow Health Reimbursement Arrangements (HRAs) to couple with Direct Primary Care (DPC) arrangements and Health Sharing Plans.

However there is a significant flaw that needs addressing and the IRS is accepting comments through August 10, 2020.

What’s the problem?

Essentially the IRS is planning to officially deem the vast majority of DPC practices as being “a health plan” or “insurance” for purposes of IRS regulations. 

There are a number of reasons this is bad policy. To start with, it is simply not true. A patient directly paying a physician is not an insurance plan. Definitively defining DPC as a health plan, in the eyes of the IRS, also moves in the wrong direction as far making DPC compatible with Health Savings Accounts. Thirdly, calling DPC a “health plan” or “insurance” has the potential for creating future confusion for other policy-making bodies, like state legislatures, who are looking at encouraging direct arrangements between physicians and patients.

How can you help? 

Take a few moments today to submit a comment. With the August 10th deadline approaching, we urge you to submit a comment as soon as possible in order to maximize attention to your submission.   

Here’s how:

1) Copy this template comment (and feel free to edit it to your liking).


Dear Commissioner Rettig and Deputy Commissioner Lough,

Thank you for this opportunity to comment on the proposed IRS rules titled “Certain Medical Care Arrangements,” REG-109755-19.

The proposal includes a number of changes that benefit American patients, including increased flexibility for the use of Health Reimbursement Arrangements (HRAs), Direct Primary Care (DPC), and Health Sharing Plans.

However there is one significant flaw I am asking the agency to address before issuing a final rule. It would be a major mistake for the IRS to deem DPC to “constitute a health plan or insurance” as currently proposed by the rule.

DPC is an innovation that is intuitively a perfect fit with Health Saving Accounts (HSAs). Together they help patients maximize control of their care and get the most value for their hard earned dollar.  Instead of aligning these two patient-empowering tools — DPC and HSAs — the IRS proposal to equate most DPC arrangements as insurance drives them further out of reach of Americans who are seeking refuge from the ever increasing cost of medical care in the system dominated by entities looking out for their interests instead of the patients’ interests.

DPC is not insurance. Payments patients make directly to their Direct Primary Care physicians are not made to cover the risk of losses, but are for ongoing care. DPC is not a health plan. There is no middleman and no management of care by bureaucrats.

The IRS should not make the all too common error of conflating coverage with care. Doing so in this instance will continue to perpetuate an illogical, policy driven incompatibility between DPC and HSAs.  

Please urgently consider reversing this problematic aspect of an otherwise beneficial proposal. Giving patients as much flexibility in arranging the care that is best for them and their families is now more than ever of critical importance.

Thank you for your consideration.


2) Paste the comment into the comment box on the Regulations.gov portal, customize to your liking, and complete the steps to submit it. 

The URL for the comment portal for this rule is:https://www.regulations.gov/comment?D=IRS-2020-0016-0001

3) Please share this email with your colleagues and contacts!