Congress expands tax-sheltered health savings, tilting benefits toward the wealthy
H.R. 548 — HSA Modernization Act · Filed by Beth Van Duyne (R-TX) · 4 cosponsors · Introduced Jan 16, 2025 · Referred to committee
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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 full analysis lists 5 implications of this text.
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