Groucho Marx once obsessed: “A hospital bed is a taxi with a meter running.” Although we’ve made some great progress since that bon mot, the fact remains that the rising costs of health care to employers and working families is threatening access and forcing many to make difficult choices. New technology and medical advancements have taken America’s health care system to a new level and I believe that it is the best system in the world. Yet, these advancements come with a price, and are only beneficial if all Americans have access to the quality of health care that is available today.
By providing tax advantages and maximum flexibility, HSAs reward Americans for taking control of their health and well being. The contributions to the accounts are deductible; investment earnings within the accounts are tax-free; and when used with health insurance, the distributions are tax-free as well. HSAs are yet another important tool to expand access to quality health care and lead America toward a competitive, consumer driven health care system.
Overall, HSAs give individuals a powerful incentive to save for health care costs that don’t fit within their deductible, giving them another option and peace of mind about unanticipated medical expenses.