H.R.1140 - Direct Medical Care Freedom Act of 2025 (119th Congress)
Summary
H.R.1140, the Direct Medical Care Freedom Act of 2025, aims to amend the Internal Revenue Code of 1986. The amendment would allow individuals with direct medical care service arrangements to remain eligible for health savings accounts (HSAs). This bill defines 'direct medical care service arrangement' as an arrangement where medical care is provided by practitioners for a fixed periodic fee.
Expected Effects
The bill, if enacted, would expand the definition of eligible individuals for HSAs to include those participating in direct medical care arrangements. This change would also classify fees paid for these arrangements as medical expenses for HSA purposes. Additionally, employers would be required to report these fees on employee W-2 forms.
Potential Benefits
- Increased healthcare access through direct medical care arrangements.
- Greater flexibility in choosing healthcare plans.
- Potential cost savings for individuals using direct care models.
- Simplification of tax treatment for direct medical care fees.
- Encourages innovation in healthcare delivery.
Potential Disadvantages
- Potential for reduced coverage compared to traditional insurance plans.
- May disproportionately benefit higher-income individuals who can afford HSAs.
- Possible complexity in reporting direct medical care fees on W-2 forms for employers.
- Risk of adverse selection in insurance markets if healthier individuals opt for direct care.
- Limited scope, focusing only on the interaction with HSAs and not addressing broader healthcare issues.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble), as it aims to improve healthcare access. Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1). The bill falls under Congress's power to regulate taxes and healthcare-related financial matters.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).