Big Beautiful Bill Delivers Win for HSAs | The American Spectator

In a Congress addicted to bad ideas and bloated spending — something we saw again last week — it’s rare to find a tax policy with broad, bipartisan support that also happens to be good policy. Health savings accounts are one of those rare gems. They promote individual responsibility, reduce health care costs, and enjoy overwhelming support from voters across the political spectrum.
The good news is that, for all its flaws, the “Big Beautiful Bill” that was just signed by the president includes several expansions to the program.
In a perfect world, we wouldn’t need tax-protected health care savings accounts. The tax code wouldn’t punish saving in the first place. Income would only be taxed once and not a second time after we save it and it generates returns. Families could set aside money for future expenses without being hit with additional penalties.
But that’s not the tax system we have. The double taxation of savings discourages people from preparing for medical and other costs.
Ideally, individuals would also be able to make their own decisions about health. But for the past century, Congress has used the tax code to pressure workers into accepting employer-controlled health insurance by penalizing those of us who choose otherwise. As Michael F. Cannon of the Cato Institute has demonstrated, this system effectively strips workers of control over roughly $1 trillion of their income. Imagine the possibilities if we could each demand more value and accountability for our share.
HSAs offer a partial solution to both of these problems. They can shelter a small portion of income and allow people to make their own decisions about some health care purchases without the government penalizing them. Since their creation in 2003, HSAs have become a lifeline for nearly 40 million account holders.
The accounts are triple tax-advantaged: Contributions go in tax-free, grow tax-free, and can be withdrawn tax-free for qualified medical expenses. They reward frugality, encourage p…