Tax Proposals and Health Savings Accounts (HSAs)
A new Government Accountability Office report indicates that Health Savings Accounts are used disproportionately by affluent households. Its findings also suggest that HSAs are being used extensively as tax shelters.
May 9, 2013
June 5, 2012
Testimony of Paul N. Van de Water - Senior Fellow, Center on Budget and Policy Priorities - Before the Subcommittee on Oversight Committee on Ways and Means U.S. House of Representatives
April 25, 2012
Revised February 10, 2012
Revised June 10, 2009
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Some proposals to reform the health care system seek to achieve this goal through changes in the tax code, such as expansion of Health Savings Accounts (HSAs) — individual accounts in which individuals who have a high-deductible health policy can save money to pay out-of-pocket health expenses. Contributions to HSAs are tax deductible and may be placed in stocks, bonds, or other investment vehicles, with the earnings accruing on a tax-free basis. Withdrawals from HSAs also are tax exempt as long as they are used for out-of-pocket medical costs.
HSAs suffer from several serious problems. Most notably, they could actually increase the number of uninsured by weakening the system of employer-based coverage through which the vast majority of Americans receive health insurance.