Subscription-based healthcare just got a big tailwind

I’m still digesting the impact of the ‘One, Big, Beautiful Bill’ - for better or for worse. But I did want to share that there is a standout feature of the legislation, which in my view heavily favors the trajectory of companies that sell subscription-based healthcare services to members. One industry friend is calling it the “MAHA dividend for digital health,” so let’s unpack it.

Going forward in 2026, direct primary care memberships will now be recognized as qualified medical expenses that can be paid for with pre-tax HSA dollars. With this change, individuals can sign up for a direct primary care and use their HSA, or separately the employer could newly subsidize it on behalf of their employees who are enrolled in a high-deductible health plan and contributing to an HSA. That’s millions of people.

For those of you who might not know exactly what a direct primary care membership is: A Direct Primary Care (DPC) membership is a healthcare payment model where patients pay a flat monthly or annual fee directly to a primary care provider for access to a set range of services, bypassing traditional insurance.

You pay a flat fee (usually $50–$150/month per person). In return, you get unlimited access to your primary care provider for no additional cost.

“This is the craziest tailwind for our company ever,” said Danish Nagda, founder and CEO of Rezilient, a company that works with hundreds of employers to offer direct primary care.

For those not familiar with direct primary care, it’s a way for a member to pay monthly or annually to access a primary care doctor or clinic - instead of using insurance. A lot of people in my network like this approach, because insurance - particularly in a fee-for-service construct - can lead to some dynamics that patients do not like. For instance, patients seem to love using asynchronous methods, like SMS messaging with their care team, but insurance provides higher reimbursement rates for video and in-person visits. Providers are drawn to it because it removes the administrative hassles associated with taking insurance.

I’ve already hit the phones this week asking several jumbo employers and policy experts in my network about this policy change. It’s a very big deal in my opinion for companies in the longevity space, direct primary care businesses, and really any company that offers primary care on a recurring, subscription basis.

My analysis on who this benefits, and how, is available to paid subscribers.

For larger employers, this provides direct primary care as an option for many more members and it will bolster enrollment in it, particularly for employees on high deductible plans and those accessing care on the individual market. As a reminder, the law now makes every Bronze-level and Catastrophic-level plans a high deductible plan, the latter of which will be the only option most people losing subsidies can afford.

“Free or subsidized direct primary care previously and even now currently through the end of the year would disqualify someone from contributing to an HSA if they were enrolled in a high deductible plan, even their employer offered the option,” said M Garrett Hohimer, a vice president of policy at the Business Group on Health (BGH), which represents employers of all sizes. With this new provision, he explained, it’s far easier for the employer to roll it out to the whole population, even if there’s both a PPO and high deductible health plan in place (that’s fairly standard for larger employers). This doesn’t benefit employers as much who only offer a PPO, or non high deductible plan because they could already subsidize direct primary care. But when given the choice between plan options, enrollment in the high deductible health plan is “robust,” noted Hohimer.

These changes will be in effect from Dec. 31, 2025. Per Lockton:

Under the OBBB, direct primary care service arrangements are not disqualifying coverage for HSA account holders and certain expenses are HSA-eligible expenses effective for months beginning after Dec. 31, 2025. Generally, direct primary care services include a monthly fee that covers office visits prior to the satisfaction of the HDHP deductible. These monthly fees are now HSA-qualified expenses, provided they do not exceed $150 per month for an individual or $300 for family (indexed for inflation annually.

There’s also a permanent extension for first dollar telehealth benefits in OBBB. This is also a big deal that will provide yet more tailwinds to telehealth in the post-Covid era. Plans have a good sense already of how an extension of that will take shape, says Hohimer.

Now that we know what’s coming, who benefits? Well obviously direct primary care companies. But I believe it’s a broader subset than that.

I view it as a potential bolster for any company that sells recurring subscription-based healthcare that includes primary care.

A few types of companies that should be thinking deeply about what to do here:

— Longevity companies — as I’ve argued, longevity borrows heavily from primary care, and most of the companies in the space charge a monthly subscription that consumers pay out of pocket. “Between subscription models and the connection to fitness membership models, every longevity company should look into how to qualify,” said Manatt managing director Tom Cassels. Businesses set up like Lifeforce or Parsley Health could stand to benefit if they figure out qualifying .

— Pediatrics companies like Summer Health and Blueberry — these companies offer a direct primary care-like model for pediatrics care, which offers 24/7 virtual access to a pediatrician. Patients largely pay out of pocket. Employers with a large number of employees with kids may want to tap into the option to now offer these services as part of the direct primary care bundle.

— Dental and vision benefits providers — OBBB essentially expands what it’s possible to use HSAs for, and adds telehealth and direct primary care as qualified expenses. It’s already possible to expense eye exams, glasses, eye surgery, routine dental, dental prosthetics and more, so one could imagine dental and vision added as part of a broader basket.

Experts say it’s possible that all these groups benefit, and potentially more. There is one reference in the bill to the definition of qualifying medical care, noting that it should consist solely of primary care services provided by primary care practitioners as defined in section 1833(x)(2)(A) of the Social Security Act. There are certain inclusions outlined, like laboratory services not typically administered in a primary care setting.

“There doesn’t seem to be much definition in the law for what direct primary care is, so it may either be left to employers or the IRS to decide what is and is not direct primary care,” Cassels explained. “It’s in the employers’ and employees’ best interest to make the definition as broad as possible.”

According to Hohimer, there could be further rule making or sub regulatory federal guidance on this.

H/T Kris Gates for the great LinkedIn analysis.

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