Health Savings Account Expansion Act

Key Points

• The bill would let people on Medicare (Parts A, B, or C), Medicaid, CHIP, and federal employee health plans open Health Savings Accounts (HSAs). Currently, HSAs are mostly limited to people with high-deductible private insurance plans. This would open tax-free medical savings to tens of millions more Americans.
• People who belong to health care sharing ministries would also become eligible for HSAs, and their membership fees and shared medical expenses would count as tax-deductible medical care. The bill specifically says these ministries are not treated as insurance for tax purposes.
• HSA funds could be used to pay health insurance premiums and for direct primary care arrangements, where you pay a doctor a flat monthly fee. Currently, HSA money generally cannot be used for premiums, and direct primary care fees are not considered qualified expenses.
• The bill removes the requirement that a health plan must cap out-of-pocket maximums to qualify as a high-deductible health plan, making it easier for more insurance plans to pair with HSAs.
• Over-the-counter drugs would only be covered by HSAs if they are prescribed by a doctor, though insulin remains covered regardless. All changes would take effect for tax years beginning after December 31, 2026.