H.R.138 - Lowering Costs for Caregivers Act of 2025 (119th Congress)
Summary
H.R. 138, the Lowering Costs for Caregivers Act of 2025, proposes amendments to the Internal Revenue Code of 1986. The bill aims to allow taxpayers to use Health Savings Accounts (HSAs), Flexible Spending Arrangements (FSAs), and Archer MSAs for medical expenses of their parents. This would effectively expand the definition of eligible medical expenses under these accounts.
Expected Effects
If enacted, this bill would allow individuals to use pre-tax dollars in HSAs, FSAs and Archer MSAs to pay for the medical expenses of their parents. This could reduce the financial burden on individuals who are caring for their parents. The changes would apply to expenses incurred or amounts paid after December 31, 2024.
Potential Benefits
- Reduced Financial Burden: Allows pre-tax funds to be used for parents' medical expenses.
- Increased Healthcare Access: Makes healthcare more affordable for parents.
- Greater Flexibility: Provides more flexibility in using HSAs, FSAs, and Archer MSAs.
- Support for Caregivers: Acknowledges and supports individuals caring for their parents.
- Potential Economic Stimulus: Could lead to increased spending on healthcare services.
Most Benefited Areas:
Potential Disadvantages
- Potential Reduction in Tax Revenue: Expanding eligible expenses could reduce government tax revenue.
- Increased Complexity: May add complexity to tax filings and account management.
- Risk of Abuse: Could create opportunities for misuse of funds.
- Limited Impact: The benefit is limited to those with HSAs, FSAs, or Archer MSAs.
- Potential for Increased Healthcare Costs: Increased demand could drive up healthcare costs.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble), as it aims to alleviate the financial burden on caregivers and improve healthcare access for parents. The power to tax and spend for the general welfare is a broad power granted to Congress. The bill falls under the purview of Congress's power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1).
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).