Does direct primary care count as health insurance?

The short answer

Direct primary care does not count as health insurance. It is a different kind of thing, which is a membership with a doctor's office. You pay a flat fee, usually $50 to $200 a month, and the office gives you a set of services in return.

Think of it like a gym membership. You pay a fixed amount, and you get to use what the gym offers. If you hurt your knee in a car crash, the gym does not pay your hospital bill. A direct primary care office works the same way. It pays only for the care it provides itself.

What makes something health insurance

HealthCare.gov describes health insurance as a contract. The insurer has to pay some or all of your health care costs, and you pay a monthly amount called a premium. The main idea is that a company takes on part of the risk. If you get very sick, the company pays a large share of the bill instead of you.

A direct primary care office does not take on that risk. It does not promise to pay for anything outside its own services. That is why it is not insurance, and why most practices say so on their websites. In many states, the law also says that a direct primary care agreement is not insurance. Those laws differ from state to state, so ask the practice how your state treats it.

Does it meet the coverage rules for the Marketplace or the old tax penalty?

No, it does not meet those rules. HealthCare.gov uses the phrase minimum essential coverage for plans that meet the Affordable Care Act's requirement to have health coverage. Its examples include Marketplace plans, job-based plans, Medicare, Medicaid and the Children's Health Insurance Program. A direct primary care membership is not on that list.

This used to matter more because of a federal tax penalty for going without coverage. HealthCare.gov says that fee applied to plan years 2018 and earlier, and it no longer applies. So today, joining direct primary care and having no insurance does not trigger a federal penalty. A few states have their own coverage rules, so check with your state if you live in one of them.

A DPC membership also does not stop you from signing up for a Marketplace plan or Medicaid. You can have both at the same time.

How an HSA fits in

An HSA, or health savings account, is a savings account that lets you set aside money for health costs and not pay tax on it. You can only put money into one if you have a certain kind of insurance plan, called a high-deductible health plan. Before 2026, a direct primary care membership could cause trouble for that, but a new IRS notice changed this.

The IRS says that, starting with months in 2026, a qualifying direct primary care arrangement does not stop you from putting money into an HSA. The monthly fee has a limit of $150 for one person or $300 for a family. The arrangement also leaves out certain services, such as most prescription drugs and some lab work. If your fee is higher than the limit, you can still use HSA money for it. You would not be allowed to add new money to the account, though. The rules are detailed, so check with a tax adviser. Our guide on using an HSA with direct primary care walks through them.

How to plan for big bills

Since direct primary care does not pay for emergencies, you need another plan for those. That might be a Marketplace plan, Medicaid if you qualify, or hospital financial assistance if you are billed. Our guide on direct primary care for people with no insurance lays out those options. If you are choosing between a membership and a high-deductible plan, our guide on high-deductible plans can help.

This page is general information and not medical advice. If you think you are having an emergency, call 911 or go to the nearest emergency room.