Congressional Ways and Means Committee Bills Are a Broad Attack on Health Coverage
Washington, D.C. – Today, the House Ways and Means Committee is considering legislation to promote the use of health savings accounts (HSA) and undermine the protections under the Affordable Care Act (ACA). HSAs overwhelmingly benefit high-income people; these bills incentivize the expansion of HSAs through tax breaks which would reward the highest-paid workers while worsening racial and ethnic inequities in health care. While Republicans are considering bills to help the wealthy and raise costs on middle class Americans, they are failing to prioritize legislation that would lower drug prices, make insurance more affordable, and make the health care system fairer for families.
In response, Protect Our Care’s Executive Director Brad Woodhouse issued a statement:
“These Republican bills are more about giving tax breaks for the wealthy than about helping people get the health care they need. Instead of expanding access to health care and fighting health disparities, these bills would allow health plans to get around anti-discrimination bills. Time and again, Republicans prove they are not for protecting health care, they are for side-stepping ACA protections of health care.”
- HSAs Make Health Care Less Accessible And Affordable. Republican efforts to promote the use of HSAs directly undermines the ACA’s goals to make quality health care more accessible and affordable for all Americans. The promotion of employer-sponsored high deductible health plans that use HSAs increases the cost of health care for employees and continues the difficult decisions low income working families have to make between putting food on the table or paying for medical care.
- HSAs Benefit The Wealthy. HSAs largely benefit high-income individuals. Contributions to HSAs are not taxed, which helps wealthy people decrease their taxable income and avoid paying their fair share. These contributions can also be invested in stocks and bonds to accrue tax-free earnings that carry over year to year — further exacerbating the wealth gap.
- HSAs Do Not Make Care More Affordable for Low-Income Individuals. HSAs do not benefit low-income individuals as they often do not have the ability to contribute to HSAs and need to use their available income to pay for medical bills and care up front. Nearly 70 percent of adults under 200 percent of the poverty line would not have been able to pay a $1,000 medical bill within 30 days in 2022, let alone contribute to a HSA. Low-income individuals also do not benefit as much from tax-free earnings as high-income individuals due to the lower amount of tax deductions from being in a lower income tax bracket. Employers who offer high deductible health plans, where HSAs are necessary, typically contribute little to nothing to their employees’ HSAs.
- HSAs Exacerbate Racial And Ethnic Inequities In Health Care. Black and Latino people with private insurance are half as likely to have HSAs as white and Asian people. Per the Center on Budget and Policy Priorities: “Against a backdrop of long-standing racial disparities in wealth — a typical white family in 2019 had eight times the wealth of a typical Black family and five times the wealth of a typical Latino family — HSAs provide preferential tax treatment that is disproportionately out of reach for people of color.”
- HSAs Cost The Government Billions. HSAs will cost the government $182 billion between 2023 and 2032. Meanwhile, the cost of President Biden’s plan for permanently closing the Medicaid coverage gap or permanently extending marketplace coverage premium tax credits over the next 10 years would cost roughly the same amount at $200 billion and $183 billion respectively. Unlike the bills to expand HSAs, Medicaid expansion and marketplace premium tax credits would allow millions of uninsured individuals to gain quality coverage.