Congress quietly expands tax breaks for wealthy to skip traditional insurance

What it does

This bill expands Health Savings Accounts (HSAs) by allowing people to use them for a much broader range of medical arrangements—including direct-pay doctor fees, health care sharing ministries (religious cost-sharing groups), and insurance premiums—while nearly tripling contribution limits ($10,800 individual, $29,500 family). It also reclassifies these arrangements so they are no longer treated as traditional health insurance, and lowers the tax penalty for non-medical HSA withdrawals from 20% to 10%.

Why we flagged it

The bill's core function is to dramatically expand HSA eligibility and contribution limits while reclassifying non-traditional medical arrangements (direct-pay, faith-based cost-sharing) as HSA-eligible expenses. This is functionally a tax subsidy for high-income savers and a mechanism to route people away from regulated insurance into alternative arrangements.

What the text implies

• By allowing HSA funds to pay for health care sharing ministries (which are explicitly exempt from insurance regulations under section 5000A), the bill creates a tax-subsidized pathway for people to opt out of regulated insurance entirely, potentially destabilizing traditional insurance pools.
• The reclassification of direct-pay physician fees and ministry memberships as 'not health insurance' while making them HSA-eligible creates a two-tier system: wealthy individuals can use pre-tax dollars for unregulated alternatives, while lower-income workers remain in traditional plans.
• Lowering the non-medical HSA withdrawal penalty from 20% to 10% effectively converts HSAs into general savings accounts for higher earners, reducing the tax incentive's targeting to actual medical expenses.
• The bill does not require health care sharing ministries to maintain reserves, cover pre-existing conditions, or meet solvency standards—yet HSA funds (tax-deferred public revenue) can now subsidize them.

Who it affects

Higher-income individuals with HSAs gain significant tax-advantaged savings and flexibility, but the bill may fragment the insurance market by encouraging people to leave traditional coverage for cheaper, less-regulated alternatives (direct-pay doctors, faith-based cost-sharing). This could destabilize insurance pools and leave lower-income and sicker people in worse-funded plans.

Who stands to gain

• health insurance companies (UNH, HUM, UHS) via reduced enrollment in traditional plans
• direct-pay primary care networks and concierge medicine providers
• health care sharing ministries
• high-income individuals and families with HSA-eligible coverage

Named in the bill

Internal Revenue Code Section 223 (HSA rules), Section 5000A (health care sharing ministry definition), UnitedHealth Group (UNH), Humana (HUM), Universal Health Services (UHS), Medicare (Title XVIII), Medicaid (Title XIX), CHIP (Title XXI), TRICARE, Veterans Affairs, Indian Health Service

Where it stands

12 cosponsors: 12 Republicans.

• Jan 28, 2025 — Introduced · Congress.gov: “Introduced in House”
• Jan 28, 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

1 lobbying clients named this bill on 2 disclosure filings across 2 quarters, Mar 2026 to Jun 2026. Those filings disclosed $550,000 in lobbying spend. A filing names 40 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 0% of bills with at least one filing.

Chip Roy, the sponsor, reported $68,100 in PAC receipts in the 2026 cycle.

• Service Employees International Union Ctw-clc — $550,000 on 2 filings

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