Health Savings Accounts (HSAs) in the United States are set for their largest expansion since 2004. The House of Representatives has passed a bill that could extend the reach of these tax-favored accounts to an additional 20 million Americans.
What Happened: President Donald Trump’s “Big, Beautiful Bill,” which was passed on May 22, could potentially add 20 million more Americans to the 60 million who are already covered by HSAs, as per Roy Ramthun, a specialist with HSA Consulting Services, reported The Wall Street Journal. The bill is now set to be reviewed by the Senate in June.
The proposed changes to the HSA system, which have so far seen little opposition, could have a significant impact. The proposed changes aim to resolve current barriers that prevent many older taxpayers from accessing HSAs. They also simplify the complicated rules surrounding HSAs and expand their use to previously restricted expenses, such as gym memberships.
Under the current law, it's difficult or even impossible to use HSAs with certain Obamacare plans purchased individually. The proposal would change that by designating high-deductible Bronze and Catastrophic plans as HSA-eligible coverage.
HSAs are linked to health insurance and offer substantial tax benefits to those who can maximize them. “This would be the biggest expansion of HSAs since they took effect in 2004, and a positive jolt for the country and the industry,” Ramthun stated.
The potential expansion of HSAs, as outlined in the recent bill, could have a significant impact on the U.S. healthcare landscape, particularly for older Americans and workers under 30 who rely on ACA plans for coverage.
Why It Matters: The bill’s passage comes amid a series of significant changes to the U.S. healthcare and tax systems. Earlier in May, President Donald Trump’s “big beautiful bill” was approved by the House, introducing substantial alterations to the tax system and measures related to Medicaid and the Supplemental Nutrition Assistance Program (SNAP).
However, it was later revealed that the bill includes substantial cuts to Medicaid, a fact that was initially denied by top Republicans. The bill’s impact on Medicaid, alongside its other provisions, has sparked significant debate and controversy.
That said, Gideon Lukens, Senior Fellow and Director of Research and Data Analysis at the Center On Budget And Policy Priorities, feels that the lawmakers should reject HSA expansion because it will mostly be beneficial to people with higher income and would not make healthcare more affordable or accessible.
He also highlighted that HSAs are projected to cost $180.8 billion in lost revenues between 2025-2034, as per U.S. Treasury data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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