The expansion is one of several actions Roy said could make Americans healthier by removing government subsidies and regulations and increasing choice and competition in health care services.
“The Trump administration and congressional Republicans have the opportunity to deliver transformational reform to our healthcare system and ‘Make America Healthy Again,’” Roy wrote.
His plan would remove restrictions on who is eligible to participate in an HSA, how much tax-sheltered money can be contributed, and what it can be used for.
Critics of the HSA program say it benefits those who can already afford health care while doing little to help low-income Americans afford treatment.
HSAs are now available only to people who have a high-deductible health insurance plan, which the IRS defines as $1,650 for an individual or $3,300 for a family.
These plans can have annual out-of-pocket expenses of up to $16,600 for a family.
The limit for tax-deductible contributions to an HSA is $4,300 for individual plans and $8,550 for family plans in 2025.
The contribution limits are adjusted for inflation, but that has not kept pace with rising costs according to Roy.
Opposition Arguments
His plan would raise the contribution limits to $12,000 for an individual and $24,000 for a family and increase the limit for catch-up contributions for people aged 55 to 65 from $1,000 to $5,000.The proposal would open eligibility to the nearly 88 million Americans enrolled in Medicare, Medicaid, and other federal health plans including TRICARE, and the Indian Health Service, and those covered through the Veterans Administration.
Roy’s plan would also allow HSA funds to be used for health insurance premiums, making a larger share of health care spending non-taxable.
“Contributions can be invested in stocks and bonds, accruing earnings that are tax-free, and withdrawals are also not taxable if they are used for medical expenses deemed ‘qualified’ under federal tax rules.”
The average amount contributed to HSAs was $927 below the maximum for individuals and $4,527 below the allowed amount for families.
“Everyone can benefit from its triple tax-advantaged status,” Roy wrote, citing data indicating that more than two-thirds of HSA holders live in zip codes with a median household income below $100,000 per year.
Republicans attempted a similar expansion of the HSA program in 2023.
Critics of HSAs have generally favored increased government intervention in the health care system instead.
Other Proposals
Roy offered other proposals for reducing the cost of health care, including some aimed at improving Americans’ health.“The United States actively subsidizes foods that are making us sick—to the tune of $30 billion per year,” Roy wrote.
“Over a million Americans’ lives each year are cut short because of preventable diseases like heart disease, diabetes, and certain cancers fueled by the terrible incentives in our healthcare system.”
Roy also suggested limiting the consolidation of hospitals and the merger of insurance companies with other service providers, which he said would increase price competition and create more choices for consumers.
Other suggestions aim to increase consumer choices in risk management by methods including cost-sharing organizations as an alternative to health insurance, catastrophic health insurance, and short-term health insurance.
