NH GOP Bets On Direct-Pay Health Care To Cut Costs

By Leonard Robinson, NH Journal

New Hampshire Republicans are seeking to give the free market a chance to bring down health care costs, especially as the party works to keep control of the State House in an anti-GOP environment.

“We’re all hitting the doors, talking to voters, and what we’re consistently hearing is that the cost of living is too dang high,” Rep. Jason Osborne (R-Auburn), who chairs the Committee to Elect House Republicans, told a recent Americans for Prosperity roundtable on health care policy.

One health care reform Republicans are promoting is expanding access to direct-pay health care, in which patients pay for care directly rather than through an insurance company.

The argument from Republicans and free-market groups like Americans for Prosperity is that government programs, such as Medicare and Medicaid, are the largest sources of revenue for health care providers. This, in turn, incentivizes providers to set rates based on large government budgets rather than on prices that appeal to consumers. Turning more health care consumers into shoppers could help drive prices down.

“Some 65 to 70 percent of the revenue that most hospitals across New Hampshire get comes from government health insurance programs like Medicare and Medicaid,” AFP-NH Director Greg Moore said. “If you are any kind of a business, if 70 percent of your customers were from one base, who do you think you’re going to make your business work for?” Moore said.

Direct primary care practices operate on a subscription-based model in which patients pay a flat, recurring fee for primary care services rather than being billed through health insurance.

Delphi Enhanced Primary Care in Bedford, founded by Nick Vailas, is a membership-based primary care practice. Memberships at the clinic range from $80 to $120 per month, depending on the patient’s age. Medical services are billed through insurance.

As a result of the subscription model, Delphi’s physicians have longer average appointment times and smaller patient panels, while the practice employs fewer billing staff and its doctors spend fewer hours on paperwork.

“In New Hampshire, we also have a shortage of primary care physicians, with doctors having panels of 1,500 to 3,000 patients, and they’re burned out from COVID-19. Many are quitting because they just don’t feel good about what they do,” said Vailas, who previously served as New Hampshire commissioner of health and human services.

Physicians and their staff spend an average of 13 hours per week completing prior authorization requests, according to a 2025 study by the American Medical Association.

New Hampshire lawmakers gave the direct-pay model a boost in 2019 when they passed House Bill 508, which established standards for direct primary care agreements and specified that qualifying agreements are not insurance.

“Direct-pay health care has been a priority of the New Hampshire House for a long time, and I can almost guarantee that it will continue to be a priority in the 2027 session,” Osborne said.

Republicans also unsuccessfully tried to pass House Bill 1562, which would have extended exemptions to certain direct-pay and membership-based health care facilities, though the bill specifically excluded rehabilitation facilities. The House passed the bill 181-149, but it died after the Senate returned it to the House.

But Jacob Rich, a health care policy analyst at the Reason Foundation, has a grim diagnosis for Republicans: They may be overselling the curative benefits of direct-pay health care.

“Anyone who feels like paying for these products is going to have an overall better health care experience, but it won’t reduce health care costs,” Rich told NHJournal. “In fact, it’s probably going to increase costs.”

Insurance companies will not be able to offer discounts to patients who join a direct primary care practice as a result of Affordable Care Act rules that prevent price discrimination except on the basis of age, geography, family size and tobacco use, Rich said.

The other challenge is that most patients obtain their health insurance through their employers. New Hampshire boasts the lowest ACA marketplace premiums in the country.

Only 5 percent, or 73,090 residents, obtain their health insurance through the exchange, according to the state Insurance Department.

“Most insurance is provided by your employer,” Rich said. “And it’s not like you’ll be able to forgo your employer’s insurance for direct primary care access. Not to mention, there are various things that insurance provides that direct primary care does not.”

As for expanding more free-market choices, Rep. Mark McLean (R-Manchester) sees another major obstacle: the state’s existing hospital industry.

“The [New Hampshire] Hospital Association is in fierce opposition, as they feel it will erode the strength of the state’s already weakened critical-access hospitals,” McLean told NHJournal. “The Diocese of Manchester and the counties have opposed in the past for fear that it would destabilize nursing homes, which are regulated like health care facilities by the existing statute. It will still be an uphill fight in the Senate, but I’m willing to listen and take input from anyone who wants to share ideas in good faith.”

The stakes are high for Republicans as Democrats have embraced single-payer health care as the way forward.

Moore said expanding access to direct-pay facilities is similar to other battles New Hampshire conservatives have fought, such as in education, where expanding competition has lowered costs and improved quality.

“When you create competition, costs go down, and results go up,” Moore said.

“We create a system outside of government control — the insurance-mandated system — and you go to a situation where you’re paying directly for your own care. That’s exactly what’s going to happen.”

This story was originally published by the NH Journal, an online news publication dedicated to providing fair, unbiased reporting on, and analysis of, political news of interest to New Hampshire. For more stories from the NH Journal, visit NHJournal.com.