Congress Permanently Opens First-Dollar Telehealth to 60 Million Americans

Congress recently locked in a rule that makes it easier for digital health companies to get paid for virtual visits, removing uncertainty for businesses and service providers offering telehealth to millions of patients.

The change, included in the “One Big Beautiful Bill Act,” or HR 1, made permanent rules allowing high-deductible health plans (HDHPs) to cover telehealth visits before patients meet their deductible. The move eliminates a major cost barrier that impeded about 60 million Americans from accessing virtual care.

“This legislation will give millions of American workers permanent access to coverage of telehealth services without jeopardizing their HSA eligibility,” said Kyle Zebley, senior vice president, public policy at the of the American Telemedicine Association, in a statement. “Making this permanent will provide certainty for healthcare providers, and employers, improve health outcomes, strengthen employer-sponsored health benefits, and reduce disparities in care.”

What Changed and Why It Matters for Patient Care

The roots of this change stretch back to the early days of the pandemic, when Congress first loosened the rules to help people see a doctor without leaving home. Those temporary flexibilities made it possible for people with HDHPs to access telehealth visits without paying out of pocket first. But the rule has been extended on a temporary basis since then, leaving providers in limbo.

The rule allows employers to offer first-dollar coverage for telehealth without employees losing Health Savings Account eligibility. The new law not only brings back the coverage, but makes it permanent and retroactive to the start of the year, avoiding any gap for patients and businesses.

Teladoc Health, a national virtual care company, reports that coverage of these telehealth services boosts care, and reduces long-term costs by catching issues before they become more serious. According to the company’s data, patients use its virtual primary care service two to three times more when it’s offered at no cost, resulting in 19 percent fewer emergency room visits in one large national health plan.

Beyond immediate care, telehealth services also help identify and manage chronic conditions. Teledoc said nearly half of new diabetes diagnoses and more than 40 percent of new hypertension diagnoses were identified for the first time through these digital visits.

“People are getting recommended screenings, early identification and care for chronic diseases like diabetes, and reducing the risk of more costly downstream health issues,” the company said in a statement. “Additionally, data show it can be a high-quality, more convenient and lower-cost alternative to the use of in-person ER and urgent care facilities.”

A Booming Market for Virtual Care Providers

The U.S. telehealth market reached about $24 billion last year and is projected to grow at nearly 25 percent annually for the next several years, according to market analysts. The expansion is driven by patient demand and increased insurance coverage of these services. In addition to live interactions between patients and providers, remote patient monitoring is also pushing growth higher, with the rise in chronic disease.

Investors are pouring money into virtual care providers as the market expands. Hinge Health, a digital physical therapy platform, went public in May, raising $437 million, and virtual chronic care provider Omada Health debuted on the Nasdaq in June, earning $150 million. These are rare examples of IPOs for a sector that hasn’t seen many in the past two years

Private companies are also attracting investors. LetsGetChecked, a company that helps patients manage their health from home through testing, genetic sequencing, virtual care and medication delivery, raised $165 million in January, and Nourish, which provides virtual nutrition counseling with registered dietitians, closed a $70 million Series B round in April.

Removing Outdated Regulatory Barriers to Telehealth

With the new rule change in place, telehealth advocates are pushing for further regulatory reforms to expand access to virtual care. One group, the Alliance for Connected Care, is urging the Trump administration to eliminate legacy restrictions they say are stifling telehealth innovation and access.

In a July 2025 letter to federal health officials, the organization highlights Medicare requirements for clinician location reporting, time-based billing rules, and state-by-state licensure as key barriers that no longer reflect the realities of digital health.

The group also calls for modernizing patient consent rules, simplifying device and broadband access for patients, and removing in-person visit mandates that disproportionately affect rural and homebound individuals.

“Telehealth and remote patient monitoring can empower patients to make better decisions for their health and well-being,” the group said. “The use of technology to manage patients with multiple chronic conditions or in high-risk post-acute circumstances are not just an imperative, but a necessity.”