Congress expands tax-sheltered health savings, tilting benefits toward the wealthy

What it does

This bill expands eligibility for Health Savings Accounts (HSAs) and increases contribution limits. It allows veterans without service-connected disabilities, Medicare beneficiaries age 65+, and individuals receiving Indian Health Service assistance to contribute to HSAs; permits bronze and catastrophic health plans to qualify as HSA-compatible plans; allows married couples to split catch-up contributions; and raises annual contribution limits to match deductible and out-of-pocket maximums. The changes take effect in 2026.

Why we flagged it

The bill's core function is to broaden HSA eligibility rules and increase contribution limits, making tax-advantaged health savings available to new populations and allowing higher annual deposits. This is fundamentally a tax-code modernization that incentivizes pre-tax health spending.

What the text implies

• Allowing Medicare beneficiaries (age 65+) to contribute to HSAs may create incentive to delay or reduce traditional Medicare utilization in favor of private high-deductible plans, potentially fragmenting the Medicare risk pool.
• Permitting bronze and catastrophic plans as HSA-eligible coverage lowers the actuarial value floor, potentially enabling individuals to select plans with very high out-of-pocket costs while sheltering savings from tax — shifting medical cost burden to point-of-service.
• The $500 mental health deductible carve-out creates a special exception for mental health but does not extend to other preventive services, potentially signaling incomplete parity compliance or creating administrative complexity.
• Expanding HSA eligibility to Indian Health Service beneficiaries may increase tax-advantaged savings for a population with historically lower incomes, but IHS coverage is often comprehensive and free; the interaction with HSA rules is unclear and may create unintended tax consequences.
• Increased contribution limits (tied to deductible + out-of-pocket max) will disproportionately benefit higher-income households and those with family coverage, widening the tax-subsidy gap between affluent and lower-income savers.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill expands HSA access to previously ineligible groups (veterans, seniors, Native Americans) and increases contribution room for existing users, which benefits those who can afford to save in tax-advantaged accounts. However, HSAs are primarily used by higher-income households; the expansion of bronze/catastrophic plan eligibility may incentivize lower-cost, higher-deductible coverage that shifts costs to patients at point of care, and the increased contribution limits primarily benefit aff

Who stands to gain

• HSA custodians and administrators (banks, brokers, insurers)
• High-deductible health plan insurers
• Individuals in top tax brackets with capacity to maximize contributions
• Healthcare providers offering bronze/catastrophic plans

Named in the bill

Internal Revenue Code Section 223, Medicare Part A, Indian Health Service, Patient Protection and Affordable Care Act (ACA), Archer MSAs, HCA Healthcare (semantic affinity)

Where it stands

4 cosponsors: 4 Republicans.

• Jan 16, 2025 — Introduced · Congress.gov: “Introduced in House”
• Jan 16, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

6 lobbying clients named this bill on 9 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $6,700,000 in lobbying spend. A filing names 7 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 82% of bills with at least one filing.

Beth Van Duyne, the sponsor, reported $1,221,522 in PAC receipts in the 2026 cycle.

• American Bankers Association — $5,210,000 on 2 filings
• Americans for Prosperity — $660,000 on 1 filing
• Healthequity, Inc. — $660,000 on 1 filing
• Employers Council on Flexible Compensation — $80,000 on 2 filings
• Wex Health — $50,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.