(July 2, 2018) – Yesterday, laws went into effect in Florida and Iowa that will help facilitate healthcare freedom outside of government regulatory schemes.

Florida state Rep. Daniel Burgess (R-Zephyrhills) sponsored House Bill 37 (H37) and the Iowa House of Delegates Human Resources Committee sponsored House Bill 2356 (HF2356). These new laws specify that direct primary care agreements (sometimes called medical retainer agreements) do not constitute insurance, thereby freeing doctors and patients from the onerous requirements and regulations under state insurance codes. Both laws also include provisions defining direct primary care agreements and establishing modest requirements.

In Florida, the Senate substituted H37 for the Senate version of the legislation sponsored by Sen. Tom Lee (R-Brandon) (S80) and unanimously passed the measure by a 38-0 vote. The House passed the bill 97-10. With Gov. Rick Scott’s signature in March, H37 went into effect today.

In Iowa, the Senate passed HF2356 by a 47-2 vote. The House approved the measure 94-1. Gov. Kim Reynolds signed the bill into law, effective today.

According to Michigan Capitol Confidential, by removing a third party payer from the equation, medical retainer agreements help both physicians and patients minimize costs. Jack Spencer writes:

“Under medical retainer agreements, patients make monthly payments to a physician who in return agrees to provide a menu of routine services at no extra charge. Because no insurance company stands between patient and doctor, the hassles and expense of bureaucratic red tape are eliminated, which have resulted in dramatic cost reductions. Routine primary care services (and the bureaucracy required to reimburse them) are estimated to consume 40 cents out of every dollar spent on insurance policies, so lower premiums for a given amount of coverage are another potential benefit.”

This represents the kind of cost control Obamacare promised but failed to deliver.

In 2015, Tom Woods interviewed a Kansas doctor who utilizes the direct primary care model. Dr. Josh Umbehr’s practice demonstrates the cost savings possible when doctors are unfettered from the bureaucratic health insurance system. (Author’s note: You can also listen to a podcast about my experience with direct primary care HERE.)

Under Obamacare, regulations define such programs as a primary care service and not a health insurance plan, and current IRS policy treats these monthly fee arrangements just like another health plan.


At this point, it doesn’t look like Republicans will repeal or even reform Obamacare, and the changes to the ACA proposed by the GOP would have arguably made things worse. Even with the penalty for not buying health insurance set to zero by the Republican tax plan, all other Obamacare rules and regulations remain in place. Regardless, state actions can help completely bring down the Affordable Care Act, or any national healthcare plan the Congress comes up with in the future.

Oftentimes, supporters of Obamacare criticize opponents for not having any alternative. Direct primary care offers one.

These direct patient/doctor agreements allow a system uncontrolled by government regulations to develop. It makes doctors responsive to patients, not insurance company bureaucrats or government rule-makers. Allowing patients to contract directly with doctors via medical retainer agreements opens the market. Under such agreements, market forces will set price for services based on demand instead of relying on central planners with a political agenda. The end result will be better care delivered at a lower cost.

By incentivizing creative healthcare solutions, the market will naturally provide better options, such as the Surgery Center of Oklahoma, This facility operates completely outside of the insurance system, providing a low-cost alternative for many surgical procedures.

A more open healthcare marketplace within a state will help spur de facto nullification the federal program by providing an affordable alternative. As patients flock to these arrangements and others spurred by ingenuity and market forces, the old system will begin to crumble. Creating a structure for Medicaid patients to access direct primary care would likely incentivize more doctors to adopt the direct primary care model, expanding the market further.

Passage of these two bills takes the first step toward healthcare freedom in Iowa and Florida, and creates a stepping stone to further action to nullify the onerous Affordable Care act. With this new law in place, the people of Iowa can take further steps to fully extricate themselves from Obamacare for good.

Mike Maharrey