washington watch

Over 20 million Americans may soon pay less in taxes and medical bills. Lawmakers have introduced a bipartisan bill to expand “health savings accounts.” HSAs allow you to save money for future medical expenses tax-free. They give you incentives to find healthcare providers who give the biggest bang for your bucks. The bill would expand HSAs so that they cover more medical expenses, such as chronic and preventative care. This common-sense bill – the Bipartisan HSA Improvement Act – deserves support. HSAs are triple tax-advantaged because:

• Contributions are tax-deductible.

• Accounts accrue interest, dividends, and capital gains tax-free.

• Withdrawals are not taxed as long as they’re spent on health care.

You can put away up to $3,450 a year tax-free or for your family up to $6,850. Unlike spending accounts, there’s no “use-it-or-lose-it” requirement or limits on rollovers. Your HSA money stays with you even if you get a new health plan or new job. This has made HSAs popular. In 2018, HSA assets will likely exceed $53 billion. You can only open an HSA in a high-deductible health insurance plan. High-deductible plans lower premiums but you must cover the first $1,350 of your healthcare expenses out-of-pocket. Families must pay $2,700 before insurance kicks in. Some of us aren’t used to paying a few thousand dollars in health costs. High deductibles are a powerful way to lower America’s health cost crisis. Since you have to spend your own money, you’re more likely to shop for better prices on procedures and insist on cheaper generic drugs. Those who switch from traditional plans to HSA-eligible plans spend 21% less, according to a RAND study. In other words, patients stopped visiting overpriced healthcare providers and opted instead for those that offered better value.

The proposed law will allow:

• High-deductible plans to cover checkups, medications for chronic conditions and tests before you hit your deductible.

• You to use HSA funds for gym memberships, fitness classes and sports programs.

• You to include your children to age 26. This mean saving for you and pressure on prices as more of us shop for care.

Janet Trautwein is the CEO of the National Association of Health Underwriters.