Bill Overview
Title: Child Health Savings Account Act of 2022
Description: This bill allows for the establishment of child health savings accounts for the benefit of the minor children of a taxpayer. These accounts provide for a tax deduction for amounts paid in cash, up to $3,000 in a taxable year, by an individual taxpayer to such accounts. The bill sets forth rules for the taxation of distributions from such accounts for children under and over the age of 18 years and allows for exceptions to such rules in the case of the disability or death of a child.
Sponsors: Rep. Van Duyne, Beth [R-TX-24]
Target Audience
Population: People with children under 18 who could benefit from child health savings accounts
Estimated Size: 50000000
- The bill introduces a financial mechanism that affects parents or guardians who can contribute to Child Health Savings Accounts (CHSAs).
- Approximately 72 million children in the US are under 18, and many have parents or guardians who could benefit tax-wise.
- CHSAs provide economic benefits primarily to families with disposable income to contribute to these accounts.
- The bill affects US households with children, potentially improving financial planning for health-related expenses for children.
Reasoning
- The policy is designed to benefit families with children under 18, primarily those who have the capacity to contribute funds to these savings accounts.
- Given the estimated budget, not all eligible families will benefit immediately, as they must also have sufficient disposable income.
- The wellbeing impacts will vary depending on the current economic situation of the families.
- Families with higher incomes might experience less of a wellbeing change from this policy as they already could be using other savings or investment vehicles for child health expenses.
- Low-income families may experience little or no impact if they cannot afford to contribute, although the potential for future benefit exists if they can manage contributions later.
- The policy could indirectly encourage better financial planning awareness among families.
Simulated Interviews
Marketing Manager (Los Angeles, CA)
Age: 35 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- I think this policy is helpful because it provides a structured way to save for my kids' health expenses in the future.
- The tax deduction is a nice bonus since we already try to put some money aside.
- It's good to know the money can be used without penalty if something happens.
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 | 7 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
Software Engineer (Dallas, TX)
Age: 40 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- I plan my finances carefully, and the tax deduction will definitely help.
- This policy suits parents with steady income who already do some future planning.
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 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
High School Teacher (New York, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 12/20
Statement of Opinion:
- My budget is already tight, so while the policy is a good idea, I might not be able to benefit in the short term.
- Having the option is nice, but I might not use it until my situation improves financially.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Construction Worker (Chicago, IL)
Age: 32 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 18/20
Statement of Opinion:
- We live paycheck to paycheck, so saving might not be possible right now.
- I’d like to take advantage of this once we’re more financially stable.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Financial Analyst (San Francisco, CA)
Age: 28 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- Starting a family comes with many expenses, the tax deduction is timely for us.
- I appreciate the flexibility for particular situations like disability.
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 | 7 | 7 |
| Year 20 | 7 | 7 |
Truck Driver (Atlanta, GA)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 14/20
Statement of Opinion:
- I haven’t heard much about these kinds of accounts, but I'm glad there’s a focus on health expenses for kids.
- It might take me a while to get used to the idea of saving this way.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Stay-at-home Parent (Miami, FL)
Age: 38 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- This policy is great for us because my spouse's job allows us to save a bit every year.
- It's reassuring to have a dedicated account for health expenses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Graphic Designer (Denver, CO)
Age: 36 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 11/20
Statement of Opinion:
- I love the initiative, which aligns with our approach to managing finances with an eye on tax implications.
- This could make a big difference for people well versed in finance-related decisions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Farmer (Rural Kansas)
Age: 30 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- I think it is a good policy, but many rural families might not earn enough to contribute regularly.
- It's always good to know options exist when and if financials improve.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Nurse (Phoenix, AZ)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 13/20
Statement of Opinion:
- With only one income, it's hard. I might not be able to take full advantage immediately, but I see potential.
- It could help a lot during times with unexpected medical costs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $8000000000 (Low: $6000000000, High: $10000000000)
Year 2: $10000000000 (Low: $8000000000, High: $12000000000)
Year 3: $12000000000 (Low: $10000000000, High: $14000000000)
Year 5: $15000000000 (Low: $13000000000, High: $17000000000)
Year 10: $20000000000 (Low: $18000000000, High: $22000000000)
Year 100: $30000000000 (Low: $28000000000, High: $32000000000)
Key Considerations
- Implementation requires clear guidelines regarding eligibility, contribution limits, and withdrawal conditions to ensure compliance and avoidance of misuse.
- Monitoring tax advantage utilization and adherence to intended health-related expenses would be essential to ensure the program meets its health savings goals.
- The policy could adjust incentives over time to better reach lower-income families potentially crowded out by upfront cost barriers.