Expanding Health Savings Accounts Would Boost Tax Shelters, Not Access to Care - Roughly 1 in 6 Privately Insured Adults Have HSAs

A Congressional Research Service analysis of 2017 IRS data found that tax returns exceeding $500,000 in adjusted gross income were the most likely to report individual HSA contributions, and returns between $200,000 and $1 million were the most likely to report employer HSA contributions.5 (See Figure 1.) The prevalence of HSA contributions declined as income declined, and only a small percentage. [...] HSAs Offer Little Benefit to People With Low and Moderate Incomes, Contribute to Inequities HSAs are not a viable option for people who are uninsured and can’t afford coverage, and people with low and moderate incomes benefit little from HSAs compared to high-income people. [...] Those with low and moderate incomes are less likely to be able to afford to contribute, and these accounts are not helpful for people who can’t afford to save, must use any available income for upfront medical costs, or are struggling with medical debt. [...] In 2022, roughly 68 percent of adults aged 19 through 64 with incomes under 200 percent of the federal poverty level (about $55,000 for a family of four) would not have been able to pay a $1,000 medical bill within 30 days.13 In 2018, the majority of households had less than $3,000 in their checking and savings accounts and reported they had less than they needed for emergencies. [...] For example, a large majority of uninsured people fall in the 12 percent or lower income tax bracket.16 Were they to enroll in HSA-qualified plans, their ability to deduct HSA contributions would provide them with an income tax deduction of between 0 and 12 cents on the dollar.