Bill Overview
Title: Healthcare Freedom Act of 2022
Description: This bill expands the availability of health savings accounts. It renames such accounts as health freedom accounts and allows all individuals to receive increased tax deductions for contributions to such accounts. The term qualified medical expenses is expanded to include costs associated with direct primary care, health care sharing ministries, and medical cost sharing organizations. The bill also excludes employer contributions to health freedom accounts from employee gross income for income tax purposes.
Sponsors: Rep. Roy, Chip [R-TX-21]
Target Audience
Population: People with health savings accounts or eligible healthcare expenses
Estimated Size: 30000000
- The bill impacts individuals who have health savings accounts (HSAs), as it renames them health freedom accounts and changes how they function.
- All individuals, rather than specific groups, now receive increased tax deductions for contributions, broadening the affected population.
- Because the bill redefines qualified medical expenses, individuals using direct primary care, health care sharing ministries, and medical cost sharing organizations are specifically impacted.
- People employed with employers who contribute to health freedom accounts will be impacted, especially due to the change in how these contributions are excluded from gross income.
Reasoning
- The Healthcare Freedom Act is likely to have varying impacts across different sectors of the population based on their current engagement with health savings accounts (HSAs), their health care spending habits, and employment circumstances.
- The policy is built around expanding tax advantages and broadening the definition of what counts as a qualified medical expense. Hence, people already using HSAs or those who are considering it due to these changes are primed for impact.
- The population includes individuals across various income levels, emphasizing those currently with HSAs due to favorable tax deductions.
- We expect slightly more positive wellbeing scores for those who can utilize additional tax savings and broader usage of HSAs, with greater livelihood improvements over long-term planning and medical expense considerations.
- It's also important to consider those who are not significantly impacted either because they do not have HSAs or cannot afford to contribute to them meaningfully; the policy's benefits are less tangible for these individuals.
Simulated Interviews
IT Manager (Texas)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 12/20
Statement of Opinion:
- This policy makes HSAs more appealing with the tax benefits.
- Planning for healthcare costs is easier when I can predict my tax savings.
- Employer contributions being tax-exempt is a big win.
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 | 8 | 7 |
| Year 20 | 8 | 7 |
Freelancer (California)
Age: 30 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 15/20
Statement of Opinion:
- I might consider opening a health account if tax benefits are worthwhile.
- Healthcare costs are hard to manage without a steady income.
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 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Teacher (Florida)
Age: 52 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- The policy is a boon as I near retirement, allowing me to invest more in healthcare.
- My spending power increased slightly due to tax benefits.
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 |
Graphic Designer (New York)
Age: 27 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- The expanded expense coverage makes HSAs more useful for me.
- I can support my health costs better now.
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 | 7 | 6 |
| Year 20 | 7 | 6 |
Construction Worker (Illinois)
Age: 38 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 0.0 years
Commonness: 14/20
Statement of Opinion:
- As someone without health benefits, this policy doesn't change anything for me.
- Health savings accounts are not a priority with my current income.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 4 |
| Year 2 | 4 | 4 |
| Year 3 | 4 | 4 |
| Year 5 | 4 | 4 |
| Year 10 | 4 | 4 |
| Year 20 | 4 | 4 |
Retired (Arizona)
Age: 65 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- I have no income to contribute to these accounts.
- The broader coverage of expenses is good, but I won't see much benefit.
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 |
Pharmacist (Ohio)
Age: 60 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 7/20
Statement of Opinion:
- The policy measures are great for offsetting medical costs as I age.
- Tax benefits are particularly favorable.
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 | 8 | 7 |
| Year 20 | 8 | 7 |
Small Business Owner (Colorado)
Age: 40 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I may consider these accounts if there are clear tax benefits for my business.
- Simplifies how we handle healthcare expenses.
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 |
University Student (Pennsylvania)
Age: 25 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 13/20
Statement of Opinion:
- As a student, my focus isn't yet on HSAs, but recognizing its benefits is a start.
- Future planning with such policies in mind is more viable.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Entrepreneur (Washington)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 9/20
Statement of Opinion:
- These changes offer more flexibility in spending my HSA funds.
- The tax incentives are an excellent way to bolster savings for health-related costs.
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 | 7 | 6 |
| Year 20 | 7 | 6 |
Cost Estimates
Year 1: $8000000000 (Low: $7000000000, High: $9000000000)
Year 2: $8000000000 (Low: $7000000000, High: $9000000000)
Year 3: $8000000000 (Low: $7000000000, High: $9000000000)
Year 5: $8000000000 (Low: $7000000000, High: $9000000000)
Year 10: $8000000000 (Low: $7000000000, High: $9000000000)
Year 100: $8000000000 (Low: $7000000000, High: $9000000000)
Key Considerations
- The policy provides significant tax benefits thereby lowering federal tax revenue.
- Administrative costs are considered minimal relative to the overall impact but require initial policy implementation support.
- There is potential for long-term public health benefits due to increased personal investment in healthcare.