H.R.810 - Personalized Care Act of 2025 (119th Congress)
Summary
H.R.810, the Personalized Care Act of 2025, aims to amend the Internal Revenue Code of 1986 to expand and improve health savings accounts (HSAs). The bill broadens HSA eligibility, increases contribution limits, allows HSA funds to be used for health plan and insurance premiums, and includes medical care service arrangements and health care sharing ministries as qualified medical expenses. It also reduces the penalty for nonqualified distributions and treats periodic provider fees and health care sharing ministry fees as medical care.
Expected Effects
The likely effect of this bill is to increase the utilization of HSAs by making them more accessible and flexible. This could lead to more individuals having greater control over their healthcare spending. The changes aim to provide more options for individuals to manage their healthcare expenses through HSAs.
Potential Benefits
- Increased accessibility to HSAs for a broader range of individuals, including those with short-term limited duration plans or government plans.
- Higher contribution limits allow individuals to save more for healthcare expenses, potentially reducing out-of-pocket costs.
- The ability to use HSA funds for health plan and insurance premiums provides greater flexibility in managing healthcare coverage.
- Inclusion of medical care service arrangements and health care sharing ministries as qualified expenses expands the range of services covered by HSAs.
- Reduced penalty for nonqualified distributions offers some financial relief for those who may need to use HSA funds for non-medical expenses.
Potential Disadvantages
- Increased HSA contribution limits could disproportionately benefit higher-income individuals who can afford to contribute more, potentially exacerbating healthcare inequality.
- Expanding HSA eligibility to include less comprehensive plans might lead some individuals to opt for cheaper plans with less coverage, resulting in higher out-of-pocket costs for serious medical conditions.
- The inclusion of health care sharing ministries may raise concerns about the quality and reliability of these organizations compared to traditional insurance plans.
- The changes could potentially increase the complexity of the tax code, making it more difficult for individuals to understand and comply with HSA regulations.
- The bill may shift healthcare costs to individuals, as they bear more responsibility for managing their healthcare expenses through HSAs.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's focus on healthcare and taxation 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, as outlined in Article I, Section 8, Clause 1 of the Constitution. The expansion of healthcare options and individual control aligns with the concept of promoting the general welfare. However, the specific provisions of the bill, such as the inclusion of health care sharing ministries, could raise questions related to the separation of church and state under the First Amendment, depending on how these ministries operate and whether they receive preferential treatment.
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).