Why Health Savings Accounts Are a Bust for the Poor but a Boost for the Privileged

(Photo: Grinvalds / Getty Images)

Enrollment in Health Savings Accounts (HSAs) has skyrocketed to nearly 20 million people, but there’s a catch. Very few, if any, of those 20 million people are poor. The HSAs allow individuals to use tax-protected funds for medical purposes for years to come. Some have even called them the “new 401(k)’s.” While these savings accounts can be good for people of a certain income level, they may overlook the needs of the poor.

(Photo: Grinvalds / Getty Images)

When Senate Majority Leader Mitch McConnell released his new version of the Republican health care bill July 13, he relied on a favorite Republican device to solve the nation’s health care woes — Health Savings Accounts.

Health Savings Accounts (HSAs) were established by the same legislation that created the Medicare Part D prescription drug benefit in 2003. HSAs allow individuals to make tax-deductible contributions, withdraw money tax-free to pay for qualified medical expenses and avoid taxes on the money invested in the account.

Enrollment in HSAs has skyrocketed to nearly 20 million people, but there’s a catch. Very few, if any, of those 20 million people are poor. The HSAs allow individuals to use tax-protected funds for medical purposes for years to come. Some have even called them the “new 401(k)’s.”

While these savings accounts can be good for people of a certain income level, I have concerns that they will overlook the needs of the poor, who not only stand to gain very little from the tax advantages but who also are unlikely to have thousands of dollars to contribute to such plans.

Tax Savings and a Dose of Financial Responsibility

Currently, individuals are allowed to make annual contributions of US$3,400, while families are allowed to contribute …read more

Via:: Truthout

      

, ,

No comments yet.

Leave a Reply