{"id":1436,"date":"2025-12-05T09:00:00","date_gmt":"2025-12-05T10:00:00","guid":{"rendered":"http:\/\/www.dangeladvertising.com\/?p=1436"},"modified":"2025-12-05T15:00:50","modified_gmt":"2025-12-05T15:00:50","slug":"health-savings-accounts-backed-by-gop-cover-fancy-saunas-but-not-insurance-premiums","status":"publish","type":"post","link":"http:\/\/www.dangeladvertising.com\/index.php\/2025\/12\/05\/health-savings-accounts-backed-by-gop-cover-fancy-saunas-but-not-insurance-premiums\/","title":{"rendered":"Health Savings Accounts, Backed by GOP, Cover Fancy Saunas but Not Insurance Premiums"},"content":{"rendered":"

With the tax-free money in a health savings account, a person can pay for eyeglasses or medical exams, as well as a $1,700 baby bassinet<\/a> or a $300 online parenting workshop<\/a>.<\/p>\n

Those same dollars can\u2019t be used, though, to pay for most baby formulas, toothbrushes \u2014 or insurance premiums.<\/p>\n

President Donald Trump and some Republicans are pitching the accounts as an alternative to expiring enhanced federal subsidies that have lowered insurance premium payments for most Americans with Affordable Care Act coverage. But legal limits on how HSAs can and can\u2019t be used are prompting doubts that expanding their use would benefit the predominantly low-income people who rely on ACA plans.<\/p>\n

The Republican proposals come on the heels of a White House-led change to extend HSA eligibility to more ACA enrollees. One group that would almost certainly benefit: a slew of companies selling expensive wellness items that can be purchased with tax-free dollars from the accounts.<\/p>\n

There is also deep skepticism, even among conservatives who support the proposals, that the federal government can pull off such a major policy shift in just a few weeks. The enhanced ACA subsidies expire at the end of the year, and Republicans are still debating among themselves whether to simply extend them.<\/p>\n

\u201cThe plans have been designed. The premiums have been set. Many people have already enrolled and made their selections,\u201d Douglas Holtz-Eakin, the president of the American Action Forum, a conservative think tank, warned senators on Nov. 19. \u201cThere\u2019s very little that this Congress can do to change the outlook.\u201d<\/p>\n

Cassidy\u2019s Plan<\/strong><\/p>\n

With health savings accounts, people who pay high out-of-pocket costs for health insurance are able to set aside money, without paying taxes, for medical expenses.<\/p>\n

For decades, Republicans have promoted these accounts as a way for people to save money for major or emergent medical expenses without spending more federal tax dollars on health care.<\/p>\n

The latest GOP proposals would build on a change<\/a> included in Republicans\u2019 One Big Beautiful Bill Act, which makes millions more ACA enrollees eligible for health savings accounts. Starting Jan. 1, those enrolled in Obamacare\u2019s cheapest coverage may open and contribute to HSAs.<\/p>\n

Now Republicans are making the case that, in lieu of the pandemic-era enhanced ACA subsidies, patients would be better off being given money to cover some health costs \u2014 specifically through deposits to HSAs.<\/p>\n

The White House has yet to release a formal proposal, though early reports<\/a> suggested it could include HSA contributions as well as temporary, more restrictive premium subsidies.<\/p>\n

Sen. Bill Cassidy \u2014 a Louisiana Republican who chairs the Senate Health, Education, Labor, and Pensions Committee and is facing a potentially tough reelection fight next year \u2014 has proposed loading HSAs with federal dollars sent directly to some ACA enrollees.<\/p>\n

\u201cThe American people want something to pass, so let\u2019s find something to pass,\u201d Cassidy said on Dec. 3, pitching his plan for HSAs again. \u201cLet\u2019s give power to the patient, not profit to the insurance company.\u201d<\/p>\n

He has promised a deal can be struck in time for 2026 coverage.<\/p>\n

Democrats, whose support Republicans will likely need to pass any health care measure, have widely panned the GOP\u2019s ideas. They are calling instead for an extension of the enhanced subsidies to control premium costs for most of the nearly 24 million Americans enrolled in the ACA marketplace, a larger pool than the 7.3 million people the Trump administration estimates soon will be eligible for HSAs.<\/p>\n

HSAs \u201ccan be a useful tool for very wealthy people,\u201d said Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee. \u201cBut I don\u2019t see it as a comprehensive health insurance opportunity.\u201d<\/p>\n

Who Can Use HSAs?<\/strong><\/p>\n

The IRS sets restrictions on the use of HSAs, which are typically managed by banks or health insurance companies. For starters, on the ACA marketplace, they are available only to those with the highest-deductible health insurance plans \u2014 the bronze and catastrophic plans.<\/p>\n

There are limits on how much can be deposited into an account each year. In 2026 it will be $4,400 for a single person and $8,750 for a family.<\/p>\n

Flexible spending accounts, or FSAs \u2014 which are typically offered through employer coverage \u2014 work similarly but have lower savings limits and cannot be rolled over from year to year.<\/p>\n

The law that established HSAs prohibits the accounts from being used to pay insurance premiums, meaning that without an overhaul, the GOP\u2019s proposals are unlikely to alleviate the problem at hand: skyrocketing premium payments. Obamacare enrollees who receive subsidies are projected to pay 114%<\/a> more out-of-pocket for their premiums next year on average, absent congressional action.<\/p>\n

Even with the promise of the government depositing cash into an HSA, people may still opt to go without coverage next year once they see those premium costs, said Tom Buchmueller<\/a>, an economics professor at the University of Michigan who worked in the Biden administration.<\/p>\n

\u201cFor people who stay in the marketplace, they\u2019re going to be paying a lot more money every month,\u201d he said. \u201cIt doesn\u2019t help them pay that monthly premium.\u201d<\/p>\n

Others, Buchmueller noted, might be pushed into skimpier insurance coverage. Obamacare bronze plans come with the highest out-of-pocket costs.<\/p>\n

An HHS Official\u2019s Interest<\/strong><\/p>\n

Health savings accounts can be used to pay for many routine medical supplies and services, such as medical and dental exams, as well as emergency room visits. In recent years, the government has expanded the list of applicable purchases to include over-the-counter products such as Tylenol and tampons.<\/p>\n

Purchases for \u201cgeneral health\u201d are not permissible, such as fees for dance or swim lessons. Food, gym memberships, or supplements are not allowed unless prescribed by a doctor for a medical condition or need.<\/p>\n

Americans are investing more into these accounts<\/a> as their insurance deductibles rise, according to Morningstar. The investment research firm found that assets in HSAs grew from $5 billion 20 years ago to $146 billion last year. President George W. Bush signed the law establishing health savings accounts in 2003, with the White House promising<\/a> at the time that they would \u201chelp more American families get the health care they need at a price they can afford.\u201d<\/p>\n

Since then, the accounts have become most common for wealthier, white Americans who are healthy and have employer-sponsored health insurance, according to a report<\/a> released by the nonpartisan Government Accountability Office in September.<\/p>\n

Now, even more money is expected to flow into these accounts, because of the One Big Beautiful Bill Act. Companies are taking notice of the growing market for HSA-approved products, with major retailers such as Amazon, Walmart, and Target developing online storefronts dedicated to devices, medications, and supplies eligible to be purchased with money in the accounts.<\/p>\n

Startups have popped up in recent years dedicated to helping people get quick approval from medical providers for various \u2014 and sometimes expensive \u2014 items, memberships, or fitness or health services.<\/p>\n

Truemed \u2014 a company co-founded in 2022 by Calley Means, a close ally of Health and Human Services Secretary Robert F. Kennedy Jr. \u2014 has emerged as one of the biggest players in this niche space.<\/p>\n

A $9,000 red cedar ice bath and a $2,000 hemlock sauna, for example, are available for purchase with HSA funds through Truemed. So, too, is the $1,700 bassinet, designed to automatically respond to the cries of a newborn by gently rocking the baby back to sleep.<\/p>\n

Truemed\u2019s executives say its most popular products are its smaller-dollar fitness offerings, which include kettlebells, supplements, treadmills, and gym memberships.<\/p>\n

\u201cWhat we\u2019ve seen at Truemed is that, when given the choice, Americans choose to invest their health care dollars in these kinds of proven lifestyle interventions,\u201d Truemed CEO Justin Mares told KFF Health News.<\/p>\n

Means joined the Department of Health and Human Services in November after a stint earlier this year at the White House, where he worked when Trump signed the One Big Beautiful Bill Act into law in July. Truemed\u2019s general counsel, Joe Vladeck, said Means left the company in August.<\/p>\n

Asked about Means\u2019 potential to benefit from the law\u2019s expansion of HSAs, HHS spokeswoman Emily Hilliard said in a statement that \u201cCalley Means will not personally benefit financially from this proposal as he will be divesting from his company since he has been hired at HHS as a senior advisor supporting food and nutrition policy.\u201d<\/p>\n

Truemed is privately held, not publicly traded, and details of how Means will go about divesting have not been disclosed.<\/p>\n

KFF Health News<\/a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF\u2014an independent source of health policy research, polling, and journalism. Learn more about KFF<\/a>.<\/p>\n

USE OUR CONTENT<\/h3>\n

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