Tax Proposals and HSAs Archive
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Paul Van de Water Testimony: Health Reform’s Health Insurance Tax
May 9, 2013
Mr. Chairman, Ranking Member Hahn, and members of the subcommittee, I appreciate the invitation to appear before you today. The Affordable Care Act (ACA) will extend health insurance coverage to 27 million people and help assure that Americans have access to affordable coverage. And it will do so in a fiscally responsible way. In … -
Limitation on Use of Tax-Advantaged Health Accounts Should Not Be Repealed
June 5, 2012
The House will consider legislation this week to repeal the health reform law’s limitation on the use of flexible spending accounts (FSAs) and other tax-advantaged accounts to buy over-the-counter medicines. The limitation makes sense both as tax policy and as health policy and should not be repealed. (The bill, H.R. 436, … -
Testimony of Paul N. Van de Water - Senior Fellow, Center on Budget and Policy Priorities - Before the Subcommittee on Oversight Committee on Ways and Means U.S. House of Representatives
April 25, 2012
Mr. Chairman, Ranking Member Lewis, members of the subcommittee, I appreciate the invitation to appear before you today. The Affordable Care Act (ACA) includes a number of spending reductions and tax increases designed to assure that expanding health coverage does not drive up the deficit. Some provisions limit the use of tax-advantaged … -
Georgia’s Tax Breaks to Increase Use of Health Savings Accounts Did Not Expand Health Coverage
Revised February 10, 2012
New data show that an approach to covering the uninsured that Newt Gingrich's Center for Health Transformation (CHT) largely designed and heavily promoted to Georgia policymakers — and that Georgia adopted in 2008 — has failed to produce the promised results. The Georgia plan features multiple tax breaks to expand the use of … -
Curbing Flexible Spending Accounts Could Help Pay For Health Care Reform
Revised June 10, 2009
Congress should consider scaling back or eliminating health care flexible spending accounts (FSAs) [1] as part of its effort to pay for health care reform. This paper, which is part of a series of papers on proposals to help pay for health reform, outlines several ways in which Congress could curtail FSAs. FSAs are designed to allow employees to pay … -
Statement: Robert Greenstein to Health Reform Financing Roundtable of the Senate Finance Committee
May 12, 2009
Thank you for inviting me to discuss health care reform financing issues. This is an important aspect of health care reform. Financing is Critical Some 46 million Americans are uninsured, a problem that other western industrialized nations have been able to address. In addition, rising health care costs … -
New Georgia and Florida Health Plans Unlikely to Reduce Ranks of Uninsured
July 1, 2008
This year, Georgia and Florida — states in which the percentage of people who are uninsured is well above the national average of 18 percent — have enacted legislation aimed at decreasing the number of uninsured residents. Georgia created new tax breaks for high-deductible health plans, while Florida will allow private … -
GAO Study Again Confirms Health Savings Accounts Primarily Benefit High-Income Individuals
May 19, 2008
A new Government Accountability Office (GAO) report indicates that Health Savings Accounts are used disproportionately by affluent households. Its findings also suggest that HSAs are being used extensively as tax shelters.[1] What Are Health Savings Accounts and Why Are They Attractive as Tax Shelters? Established by the 2003 … -
Martinez Bill Would Weaken Children’s Health Coverage
November 5, 2007
Senator Mel Martinez (R-FL) has introduced legislation (S. 2193) intended to rally opponents of bipartisan children’s health legislation recently vetoed by President Bush, a revised version of which was passed by the House on October 25 and the Senate on November 1. The Martinez bill also has been introduced in the House, as H.R. 3888, … -
Historical Averages Not a Meaningful Benchmark for Future Revenues
August 22, 2007
The “Mid-Session Review” that the Office of Management and Budget issued last month projects that revenues will be slightly above their 30-year average in 2007, measured as a share of the economy. The Administration and many of its supporters have cited this fact as evidence that current tax policies are generating an … -
Administration’s Proposed Tax Deduction for Health Insurance Seriously Flawed
July 31, 2007
In an attempt to revive its proposal to establish a new standard tax deduction for the purchase of health insurance, the Administration has injected the proposal into the congressional debate over renewing and strengthening the State Children’s Health Insurance Program (SCHIP). The Administration has threatened to veto the … -
Would Tax Incentives Be an Effective Way to Expand Health Coverage for Low-Income Children and Families?
July 31, 2007
In recent weeks, the Administration has threatened to veto legislation in Congress that would reauthorize the SCHIP program and extend health coverage to several million uninsured children. As an alternative, the Administration has touted the virtues of the private insurance market and attempted to revive consideration of its proposal to … -
Statement of Robert Greenstein on Budget and Health Care Tax Issues in State of the Union
January 23, 2007
On Budget Policy In committing his Administration to a balanced budget by 2012, the President has acknowledged that deficits matter. This is progress. But there are reasons to doubt the strength of the President’s newfound interest in fiscal discipline. First, his budget is likely … -
Last-Minute Addition To Tax Package Would Make Health Savings Accounts More Attractive As Tax Shelters For High-Income Individuals
Revised December 7, 2006
As part of the last-minute deal making today on the “tax extenders” package, House and Senate negotiators have agreed to include an expansion of Health Savings Accounts that would make these accounts more lucrative as tax shelters for high-income individuals. The HSA expansion is identical to legislation (H.R. 6134) … -
New Developments In Health Savings Accounts
Revised September 28, 2006
On September 27, the House Ways and Means Committee approved H.R. 6134, which would make Health Savings Accounts (HSAs) more attractive as tax shelters for high-income individuals. Ways and Means Chairman Bill Thomas (R-CA) stated that the bill could be enacted before the 109th Congress adjourns. The bill is particularly disturbing … -
GAO Study Confirms Health Savings Accounts Primarily Benefit High-Income Individuals
September 20, 2006
A groundbreaking new study by the Government Accountability Office (GAO) demonstrates that Health Savings Accounts (HSAs) — tax-favored savings accounts attached to high-deductible health insurance plans established under the 2003 Medicare drug law — are heavily skewed toward affluent individuals. The GAO findings also … -
Informing The Debate About Health Savings Accounts
June 13, 2006
Click on the text of the questions below to go directly to the corresponding answer. Are there now 3.2 million HSAs in use? Do employers offering high-deductible health insurance plans and HSAs to their employees contribute to the HSAs to help their employees cover the higher out-of-pocket costs related to the high … -
Health Savings Accounts Unlikely To Significantly Reduce Health Care Spending
June 12, 2006
Proponents of Health Savings Accounts (HSAs) — tax-favored savings accounts attached to high-deductible health insurance plans — have long argued that widespread adoption of HSAs will contain health care costs substantially over time. The theory is that the high deductibles required under HSAs (at least $1,050 for … -
A Brief Overview of the Major Flaws With Health Savings Accounts
April 5, 2006
Established under the 2003 Medicare drug legislation, Health Savings Accounts (HSAs) are individual accounts in which individuals who have a high-deductible health policy can save money to pay out-of-pocket health expenses. In tax year 2006, any individual who enrolls in a health plan with a deductible of at least $1,050 for individual … -
Administration Defense of Health Savings Accounts Rests on Misleading Use of Statistics
February 16, 2006
To encourage wider use of Health Savings Accounts (HSAs), tax-free individual accounts for health-related expenses that must be coupled with a high-deductible insurance policy, the Administration is proposing significant new HSA-related tax breaks that it estimates would cost $156 billion over ten years. Several important concerns … -
The Cost and Coverage Impact of the President’s Health Insurance Budget Proposals
February 15, 2006
In this analysis I report the results of my efforts to assess the impact that the President’s health insurance budget proposals on government costs and insurance coverage in the U.S. The results reported here are from the microsimulation model that I developed with the generous assistance of the Kaiser Family Foundation. I … -
President Greatly Reduced His Health Proposals For Lower-Income Families While Expanding Health Benefits For The More Affluent
February 8, 2006
President Bush’s budget includes $156 billion in tax cuts over the next ten years (2007-16) to promote Health Savings Accounts and associated high-deductible insurance policies, with the large majority of this money going to more affluent households. This is slightly larger than the $133 billion in tax cuts for health care that the President … -
Expansion in HSA Tax Breaks is Larger – and More Problematic – Than Previously Understood
Revised February 7, 2006
In conjunction with the State of the Union Address, the President proposed an expansion of tax breaks both for Health Savings Accounts (HSAs) and for premiums for the high-deductible insurance policies that are purchased in conjunction with HSAs. The President is proposing a large increase in the amount that can be contributed to a HSA on a … -
President's Health Care Tax Cut Proposals Are Likely To Weaken Employer-Based Health Insurance, Primarily Benefit High-Income People, and Worsen Deficits
January 31, 2006
In tonight’s State of the Union address and as part of the upcoming fiscal year 2007 budget, President Bush is expected to propose major new tax cuts related to health care.[1] Chief among them could be major expansions of Health Savings Accounts (HSAs) and a new income tax deduction for out-of-pocket medical costs. These … -
Medicaid and SCHIP Retention in Challenging Times: Strategies from Managed Care Organizations
Revised September 13, 2005
Efforts to reduce the number of low-income uninsured children and families have focused on expanding eligibility for public insurance programs and finding ways to facilitate enrollment in these programs. Another key factor that contributes to reducing the number of uninsured is the retention of eligible beneficiaries once they … -
The Senate's Cuts in Medicaid and SCHIP Substantially Exceed Those the Administration Proposed
Revised March 14, 2005
The Senate begins consideration today of the federal budget plan for Fiscal Year 2006 adopted last week by the Senate Budget Committee. The plan requires $15.2 billion in reductions over five years in programs within the jurisdiction of the Senate Finance Committee. The bulk of this $15.2 billion — $14 billion — is … -
The House Budget Committee's Proposed Medicaid and SCHIP Cuts Are Larger Than Those the Administration Proposed
Revised March 10, 2005
Yesterday, the House Budget Committee voted on Chairman Nussle’s proposed federal budget plan for Fiscal Year 2006. The plan’s required reductions in mandatory programs are likely to lead to cuts in federal expenditures for Medicaid and the State Children’s Health Insurance Program (SCHIP) totaling $14.9 … -
President Proposes to Make Tax Benefits of Health Savings Accounts More Lucrative for Higher-Income Individuals
Revised February 9, 2004
The President’s budget proposes to expand Health Savings Accounts (HSAs) by allowing HSA participants to claim a tax deduction for the premium costs of high-deductible health insurance policies if they purchase such policies in the individual health insurance market. The stated intent of the deduction proposal is to help …
