House bill to double HSA limits slammed as perk for wealthy

investmentnews.com:

A bill recently approved by the House Ways and Means Committee would nearly double the annual limits on contributions to health savings accounts — a measure that opponents said will only provide a bigger tax perk for the wealthy.

The HSA Modernization Act the committee passed last Thursday would bump up the current annual contribution limits of $3,850 for individuals and $7,750 for families to $7,500 and $15,000, respectively.

“With 78% of health savings accounts owned by taxpayers making less than $100,000, HSAs are clearly a tool middle- and low-income families find useful,” House Ways and Means Chair Jason Smith said in a statement. “However, we can help those same families better utilize HSAs, save more to cover more of their health care costs and make more of their fellow citizens — like working seniors, veterans, and Native Americans — eligible to partake in the tax savings and flexible care options provided by HSAs.”

But Democrats said the legislation would have little effect on the people who would benefit most from greater access to health care.

“Expanding HSAs won’t expand access to health care coverage, nor will it bring down health care costs for the vast majority of Americans. It won’t improve the quality of care, reduce the burdens of medical debt, or help close racial health disparities,” Rep. Richard Neal, D-Massachusetts, said in a statement. “Nearly half of American families do not have enough money in the bank to pay a $1,000 medical bill in the next 30 days, but this is the legislation we are marking up today.”

As Congress struggled to avoid a government shutdown that seemed inevitable last week, Neal called the HSA bills “a lesson in priorities.”

The Ways and Means Committee also passed the