Payments Should Qualify as Medical Expenses, Senators Say

August 14, 2019

The Honorable Steven Mnuchin
Secretary
United States Department of the Treasury
1500 Pennsylvania Avenue NW
Washington, DC 20220

The Honorable David J. Kautter
Assistant Secretary of the Treasury for Tax Policy
1500 Pennsylvania Avenue NW
Washington, DC 20220

Dear Secretary Mnuchin and Assistant Secretary Kautter,

We are writing to urge you to expand access to Direct Primary Care (DPC) by issuing regulations pursuant to President Trump's recent Executive Order "improving Price and Quality Transparency in American Healthcare to Put Patients First."

Allowing Americans with high-deductible health plans to use their Health Savings Accounts (HSA) to make payments for DPC will expand access to primary care and help lower the cost of health care that American families pay for out of their own pockets.

First, we urge you to propose regulations that recognize periodic payments for DPC as a qualified medical expense under Section 213(d) of the Internal Revenue Code (IRC). Second, we urge you to clarify the provisions under Section 223(c) of the IRC. Currently, the Treasury Department's interpretation of Section 223(c) prevents an individual from contributing to an HSA while maintaining membership in a DPC program. While we believe the Treasury Department can make these changes under existing authorities, we ask that you inform us as quickly as possible if additional statutory authority is necessary so that Congress can act on bipartisan legislation this year.

The Senate Health, Education, Labor and Pensions Committee has heard expert testimony from two DPC doctors at bipartisan hearings over the past year that this innovative membership model increases patients' access to coordinated primary care. The model also allows patients to know prices ahead of time, without any preexisting condition exclusions or deductibles, which is consistent with the Trump Administration's agenda to improve transparency and lower the cost of health care.

We look forward to continuing to work with you on this important matter. If you have any questions, please have your staff contact Virginia McMillin at Virginia McMillin@help.senate.gov or Robert Butora at Robert Butora@cassidy.senate.gov.

Sincerely,

Lamar Alexander
Chairman

Bill Cassidy, M.D.
United States Senator