Business Leaders Beginner 9 min read

What Is Direct Primary Care and How Does It Work with a Self-Funded Health Plan?

Direct primary care (DPC) is a membership-based primary care model that bypasses insurance for routine care. Here's how it works and why employers are pairing it with self-funded plans.

By Kingsfoil Health Editorial Team, Employer Benefits Desk Published April 24, 2026

Key takeaways

Direct primary care (DPC) is a membership-based primary care model where patients pay a flat monthly or annual fee directly to a primary care practice — bypassing insurance for routine care.
Patients on DPC typically get unlimited primary care visits, longer appointments, and direct access to their physician (often via text or video) included in the membership.
DPC does NOT replace health insurance — patients still need coverage for specialty care, surgeries, hospitalizations, and emergencies. DPC pairs with insurance, often a high-deductible plan.
Employers are pairing DPC with self-funded or level-funded health plans to reduce claims costs and improve employee primary-care experience.
DPC is fee-transparent, schedule-flexible, and generally produces high patient satisfaction; the trade-off is that members still need separate coverage for non-primary care.

Healthcare in the United States has a primary-care problem. Patients wait weeks for appointments, get 7-15 minute visits when they finally see the doctor, can’t reach their physician between visits, and often don’t even have a real “primary care” relationship — just a different physician each time who’s running through their daily quota.

A growing alternative is Direct Primary Care (DPC) — a membership model that bypasses insurance for routine primary care, restoring the kind of accessible, relationship-based primary care that’s been disappearing for decades. For employers, DPC has emerged as an interesting complement to self-funded health plans, often producing both better employee experience and lower claims costs.

Here’s what DPC is, how it works, and why it’s worth knowing about as an employer.

What is Direct Primary Care?

Direct primary care is a membership-based primary care model where patients pay a flat monthly or annual fee directly to a primary care practice. In exchange, the membership typically includes:

Unlimited primary care office visits
Longer appointment times (30-60 minutes vs. 15 minutes in insurance-based primary care)
Direct physician access via text, phone, or video, including outside business hours
Basic in-office labs and procedures at member rates or included
Wholesale-cost prescription dispensing for many common medications
Chronic disease management
Coordination of specialist referrals

The defining feature: the practice does not bill insurance for primary care. The patient pays the membership; the practice provides the care; there are no copays, no deductibles applied to primary care, and no insurance claim paperwork.

DPC is not insurance. It’s a different way of paying for primary care specifically. Members still need separate health insurance to cover everything outside primary care.

How DPC works in practice

For a patient on DPC:

Joining. You sign up with a DPC practice in your area. You pay the membership fee (monthly or annual). You typically also have a brief intake appointment.

Routine care. You can call, text, video, or visit the office — typically same-day or next-day — for any primary care need. Sick visits, annual physicals, chronic condition management, basic procedures.

No surprise bills. Within the scope of primary care, you’ve already paid via membership. There are no separate bills for office visits or routine procedures.

Specialty referrals and emergencies. When you need a specialist, surgery, hospitalization, or emergency care, your DPC physician refers you, and your separate health insurance handles those costs.

Prescriptions and labs. Many DPC practices dispense common medications at wholesale cost (often dramatically less than retail pharmacy) and offer in-house lab work at member rates. Specialty medications still go through your pharmacy benefit.

For most members, the experience is a clear upgrade over traditional insurance-based primary care: faster access, longer visits, real continuity with one physician, and no surprise charges for routine care.

What DPC does NOT replace

This is the most important point to understand: DPC is not health insurance. It covers primary care only.

What DPC does NOT cover:

Specialist visits (cardiologist, dermatologist, etc.)
Surgeries
Hospitalizations
Emergency room visits
Specialty medications and complex prescriptions
Advanced imaging (MRI, CT, etc.)
Mental health beyond what the DPC physician provides
Dental, vision (separate benefits)

For all of these, the member needs separate health insurance. The DPC practice typically coordinates with the member’s insurance for referrals, but the insurance carries the financial responsibility for everything outside primary care.

This is why DPC most commonly pairs with a high-deductible health plan: the high-deductible plan covers the catastrophic and specialty care while the DPC handles the routine primary care that would otherwise count against the deductible.

Why DPC has gained traction

Several factors have driven DPC’s growth over the past decade:

1. Insurance-based primary care frustration. Patients experience traditional primary care as transactional, rushed, and inaccessible. Most insurance-based PCPs are pressured to see 25-30 patients per day, which structurally limits visit length and physician availability between visits.

2. Physician burnout in fee-for-service medicine. Many physicians find DPC’s model professionally satisfying — fewer patients, longer visits, real relationships, less administrative overhead. The supply side has grown.

3. Employer interest in cost containment. For employers on self-funded plans, primary care utilization shows up directly in claims. DPC moves primary care out of the insurance claims pipeline entirely, often at lower total cost.

4. ACA-driven HDHP growth. As HDHPs have become more common, the alignment between DPC and HDHPs has emerged: HDHP for catastrophic coverage, DPC for routine care. Members get both predictable monthly cost and tax-advantaged HSA savings.

5. Quality and outcome research. Studies of DPC practices have shown high patient satisfaction, strong continuity of care, and outcomes comparable to or better than traditional primary care for chronic disease management.¹

The growth has been geographically uneven. Some markets (Wichita, Kansas City, parts of Texas, parts of Utah) have well-developed DPC ecosystems. Other markets are still building out access.

How employers are using DPC

There are several models for incorporating DPC into employer benefits:

Model 1: Employer-paid DPC membership

The employer pays the DPC membership fee for each enrolled employee as part of the benefits package. Often paired with a self-funded or level-funded health plan, particularly an HDHP design.

Employer cost: the membership fee per employee per month
Employee benefit: access to DPC at no out-of-pocket cost
Strategic value: reduces insurance claims, improves employee primary care experience

Model 2: Employee-paid with HSA/FSA support

The employer offers DPC access but employees pay the membership directly, often using HSA or FSA dollars (where eligible — IRS rules around DPC and HSA eligibility have evolved and continue to be clarified).²

Employer cost: Minimal direct cost
Employee benefit: DPC option with tax-advantaged payment
Strategic value: Increases benefits flexibility without large employer commitment

Model 3: DPC integrated with self-funded plan design

Some employers integrate DPC into self-funded plan design — DPC visits are “free” to the member (and don’t count against deductible because they’re outside the insurance plan), and the plan design accounts for the DPC’s cost reduction in the actuarial assumptions.

This is the most sophisticated model and requires close coordination between the DPC practice, the TPA, and the benefits advisor.

How DPC Works with a Self-Funded Plan covers this integration in detail.

What DPC typically costs

DPC practices set their own prices, with significant variation across markets and demographics. Common pricing:

Adults: Often in the $50-$150 per-month range
Children: Often $10-$30 per child per month
Family rates: Many practices offer family memberships
Age-banded: Some practices charge more for older adults reflecting higher utilization

For an employer offering employer-paid DPC, the per-employee monthly cost is the membership fee plus any administrative coordination fees (usually small or included). Compared to health plan premiums, DPC adds a relatively modest cost while delivering real primary care improvement.

The pitch isn’t that DPC replaces insurance. It’s that it replaces the broken insurance-based primary care experience with something that works — while leaving insurance to do what insurance does well: protect against catastrophic costs.

The trade-offs

DPC isn’t right for every situation. Honest considerations:

Geographic limitations. DPC requires actual DPC practices in your employees’ geographies. In markets with limited DPC presence, the model is hard to deploy.

Specialist coordination. DPC physicians refer to specialists who bill through insurance. The handoff is smooth in most cases but requires both physicians to coordinate.

Member compliance. Employees who don’t engage with their DPC practice don’t benefit from the model — and the employer may have paid the membership for unused benefit. Communication and onboarding matter.

Pharmacy nuances. DPC’s wholesale-cost prescription dispensing is limited to medications the practice keeps on hand. Specialty drugs, brand-name medications, and others still go through traditional pharmacy benefits.

HSA eligibility nuances. The IRS has issued guidance that direct primary care arrangements may affect HSA eligibility in specific ways. Plan design needs to account for these rules.²

Direct Primary Care Pros and Cons walks through this in more depth.

When DPC fits

DPC tends to be a strong fit when:

You have meaningful DPC practice access in your employees’ geographies
You’re on (or moving toward) a self-funded or level-funded plan
Your employees value primary-care quality and access
You’re willing to communicate the model clearly to drive adoption
You’re paired with an HDHP design where DPC removes routine care from the deductible

DPC tends to be a less natural fit when:

Your employees are scattered across many geographies without DPC access
You’re on a fully-insured group plan and the DPC investment is harder to recoup through claims reduction
Your workforce is highly mobile across markets where DPC presence varies

Where this leaves you

Direct primary care (DPC) is a different way of paying for primary care that delivers better experience and, for the right employer setup, better economics. It’s not a replacement for health insurance — it’s a complement, particularly to high-deductible self-funded plans where DPC handles routine care and insurance handles catastrophic coverage.

For employers exploring how to deliver better employee health benefits at sustainable cost, DPC is worth evaluating. Even where it doesn’t produce dramatic claims savings, it produces real employee-experience and HR-workload improvements.

Want help evaluating whether DPC fits your business and benefits design? We can identify DPC practices in your employees’ markets, model the integration with your health plan, and walk through implementation. Talk to us.

For research on direct primary care outcomes and patient satisfaction, see academic studies and industry reports such as those from the Direct Primary Care Coalition and peer-reviewed publications referenced in academic medicine. The evidence base is growing as the model matures. ↩
IRS guidance on the interaction between Direct Primary Care arrangements and HSA eligibility has evolved over time. See IRS Notice 2023-37 and current IRS guidance on Health Savings Accounts in Publication 969 for current rules. ↩ ↩²

Frequently asked questions

What is direct primary care?

Direct primary care (DPC) is a membership-based primary care model where patients pay a flat monthly or annual fee directly to a primary care practice. The membership typically includes unlimited primary care visits, longer appointment times, direct physician access (text, phone, video), and often basic in-office labs and procedures. DPC bypasses insurance for routine primary care, eliminating copays and deductible accumulation for those services.

Does direct primary care replace health insurance?

No. DPC covers primary care only — it does not cover specialty care, surgeries, hospitalizations, emergencies, or most prescriptions. DPC members still need health insurance to cover everything outside primary care. Most DPC patients pair their membership with a high-deductible health plan, since the DPC handles the routine care that would otherwise count against the deductible.

How does direct primary care work for employers?

Employers can offer DPC as a benefit alongside their health plan. Two common models: (1) the employer pays the DPC membership fee directly for employees as part of the benefits package; (2) the employer makes DPC available with the employee paying the membership fee, often using HSA/FSA dollars. Pairing DPC with a self-funded plan or level-funded plan can produce meaningful claims savings as primary care moves out of the insurance claims pipeline.

Is direct primary care worth it?

For employers and employees who use primary care meaningfully, DPC typically delivers better experience and often better total cost than traditional insurance-based primary care. The longer appointments, direct physician access, and absence of copays produce measurably higher patient satisfaction. The total-cost question depends on how much primary care the patient uses; heavy users see better economics, light users may not.

What does direct primary care typically cover?

DPC typically includes: unlimited office visits, extended-time appointments, direct physician access (texts, phone calls, video visits), basic in-office procedures (skin biopsies, joint injections), some in-office labs at member rates, basic prescription dispensing at wholesale cost, and chronic-condition management. It does NOT include: hospitalizations, surgeries, ER visits, specialist visits, advanced imaging, or specialty drugs — all still need health insurance coverage.

How is DPC different from concierge medicine?

DPC and concierge medicine are similar models but with different price points and structures. Concierge medicine typically charges higher membership fees (sometimes thousands per month) and may still bill insurance for visits. DPC is generally lower-cost (often $50-$150 per month for adults), doesn't bill insurance, and is designed to be financially accessible. The line between them blurs at the edges, but DPC's price point is what makes it viable as an employer benefit.

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