Bill Overview
Title: Health Savings Freedom Act of 2022
Description: This bill revises health savings account (HSA) provisions to (1) increase the limit on contributions to such accounts for individuals and families, (2) eliminate the requirement to maintain high deductible coverage as a condition of eligibility for participation in such accounts, and (3) expand the definition of qualified medical expenses for purposes of HSAs to include medicine and drugs and certain long-term care expenses.
Sponsors: Rep. Van Duyne, Beth [R-TX-24]
Target Audience
Population: People who use or plan to use Health Savings Accounts (HSAs)
Estimated Size: 33000000
- Health savings accounts (HSAs) are used primarily in the United States, thus the affected population is predominantly American.
- The bill aims to increase the contribution limit, which would primarily impact individuals who are already using or considering an HSA in the United States.
- Eliminating the high deductible plan requirement expands eligibility, affecting more people who previously could not participate due to not having such a plan.
- Including more medical expenses expands the utility of HSAs, potentially increasing adoption among those who might have seen them as less useful previously.
- Currently, about 10-12% of American adults are enrolled in HSAs, and this law could increase that number.
- This bill doesn't specify a focus on vulnerable or low-income populations, but offers benefits broadly to all HSA holders or potential holders.
Reasoning
- Given a budget of $5 billion in the first year, this policy could significantly increase the financial flexibility of HSA users, potentially improving their access to healthcare and their overall financial well-being.
- The revisions are particularly beneficial for middle and upper-income individuals who are more likely to contribute the maximum allowable to their HSAs, thus they would benefit from increased contribution limits.
- The removal of the high deductible plan requirement broadens the eligibility, potentially appealing to a wider range of income brackets, though high-income individuals are more likely to contribute significantly.
- Expanding the definition of qualified expenses includes more kinds of care, likely benefitting a wide array of users across different demographics.
- This bill does not explicitly focus on lower-income individuals, but some effects might trickle down if more employers offer HSAs as part of broader health coverage options.
- Outreach efforts will be essential to inform potential beneficiaries who might not currently be aware of HSAs or how they can now benefit their healthcare planning.
Simulated Interviews
Marketing Manager (New York, NY)
Age: 34 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 8/20
Statement of Opinion:
- I already use an HSA, so I'm excited about contributing more and using it for a wider range of healthcare needs.
- The increase in contribution limits will allow me to save more for health expenses, which is great as healthcare costs are only going up.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Software Engineer (Austin, TX)
Age: 29 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 12/20
Statement of Opinion:
- I've been considering opening an HSA but wasn't convinced it would be useful for me due to eligibility requirements.
- The new policy makes opening an HSA more appealing, especially with more expenses covered.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Freelance Graphic Designer (Seattle, WA)
Age: 45 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- Being self-employed, having the flexibility to contribute more to an HSA is beneficial.
- Not needing a high deductible plan is particularly valuable for someone like me who doesn't always have predictable income.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
College Professor (Bloomington, IN)
Age: 52 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- I maximize my HSA contributions, and the ability to increase that is appealing.
- The changes won't impact my immediate situation a lot, but having more covered expenses is a nice plus.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Nurse (Boston, MA)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- The ability to use HSA funds for more expenses aligns well with my retirement planning.
- Not having a high deductible requirement opens possibilities for more accessible health insurance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Tech Startup Employee (Miami, FL)
Age: 26 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 15.0 years
Commonness: 14/20
Statement of Opinion:
- It's hard to save much with my current salary, so any potential to save on taxes or medical expenses helps.
- This policy might allow me to start thinking long-term about healthcare savings.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Restaurant Owner (Chicago, IL)
Age: 40 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 7/20
Statement of Opinion:
- I don't have a high deductible plan, so this change would allow me to start an HSA.
- I see this as a good way to manage health expenses for me and my employees.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Software Developer (San Francisco, CA)
Age: 33 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 15.0 years
Commonness: 5/20
Statement of Opinion:
- Increased limits match my ability to save more pre-tax, which is great.
- This keeps HSAs competitive compared to other investment tools.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Teacher (Phoenix, AZ)
Age: 38 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 15/20
Statement of Opinion:
- This policy seems beneficial if I can manage to save more despite my limited salary.
- Health expenses are significant, so broader coverage is appealing if I can contribute more.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Graphic Designer (Portland, OR)
Age: 50 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- The policy might make HSAs viable for me now, as I couldn't get a high deductible plan.
- My focus on out-of-pocket expenses means any added flexibility is a win.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 7 | 4 |
Cost Estimates
Year 1: $5000000000 (Low: $3000000000, High: $7000000000)
Year 2: $5500000000 (Low: $3500000000, High: $7500000000)
Year 3: $6000000000 (Low: $4000000000, High: $8000000000)
Year 5: $6500000000 (Low: $4500000000, High: $8500000000)
Year 10: $7500000000 (Low: $5000000000, High: $10000000000)
Year 100: $10000000000 (Low: $7000000000, High: $13000000000)
Key Considerations
- Federal tax revenue will likely decrease due to higher HSA contribution limits and broadened eligibility.
- HSA adoption might increase, but impact depends heavily on consumer perception and understanding of HSAs.
- Broader qualification of medical expenses offers more incentives for middle-income earners to adopt or expand HSA usage.