Improving Health Savings Accounts
Health Savings Accounts (HSAs) were first established as part of the Medicare Modernization Act of 2003. HSAs combine high-deductible health plans (HDHP) with a personally owned, tax-preferred and portable health savings account. Individuals with a HDHP may use their HSA to pay for qualified medical expenses. To qualify for an HSA, a high-deductible plan must have a minimum deductible of $1,000 for an individual policy and $2,000 for a family policy. The maximum yearly out-of-pocket spending can be no more than $5,000 for an individual and no more than $10,000 for a family. Tax-free contributions to HSAs are currently capped at $3,400 for individuals and $6,750 for families. All deductibles, out-of-pocket spending, and contributions are indexed to medical inflation.