Payments Should Qualify as Medical Expenses, Senators Say

April 16, 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 recognize periodic payments for Direct Primary Care (DPC) as a qualified medical expense under Section 213(d) of the Internal Revenue Code. Recognizing these payments will expand access to primary care and help reduce health care costs for American families.

The Senate Health, Education, Labor and Pensions Committee has heard expert testimony from two DPC doctors in recent hearings 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.

In 2014, Senators Murray and Cantwell wrote to the Internal Revenue Service (IRS) asking that the IRS reevaluate whether DPC arrangements could qualify as a medical expense for Heath Savings Accounts and other tax preferred health accounts. Then-IRS Commissioner John Koskinen responded that the IRS and Treasury Department were reviewing the rules regarding what constitutes medical care expenses and would consider Senator Murray and Senator Cantwell's input.

We hope you will recognize that periodic payments to primary care physicians for DPC arrangements qualify as medical expenses under Section 213(d).

Thank you for your attention to this matter. If you have any questions, please have your staff contact Virginia McMillin at Virginia_McMillin@help.senate.gov.

Sincerely,

Lamar Alexander
Chairman