S.276 - Personalized Care Act of 2025 (119th Congress)
Summary
The Personalized Care Act of 2025 (S.276) 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, and allows HSA funds to be used for a wider range of healthcare expenses, including health plan premiums and medical care service arrangements. It also includes provisions related to health care sharing ministries and restores a lower penalty for nonqualified distributions.
Expected Effects
The act would likely increase the utilization of HSAs by making them more accessible and financially attractive. This could lead to individuals having more control over their healthcare spending and choices. The changes aim to provide greater flexibility and options for individuals in managing their healthcare needs and expenses.
Potential Benefits
- Increased Healthcare Access: Broader eligibility allows more individuals to use HSAs.
- Greater Financial Flexibility: Higher contribution limits and expanded expense coverage provide more control over healthcare spending.
- Support for Alternative Healthcare: Inclusion of health care sharing ministries offers options outside traditional insurance.
- Reduced Penalties: Lower penalties for nonqualified distributions make HSAs more appealing.
- Promotion of Wellness: Inclusion of prepaid medical services designed to screen for, diagnose, cure, mitigate, treat, or prevent disease and promote wellness.
Potential Disadvantages
- Potential for Increased Healthcare Costs: Expanded coverage could lead to overutilization of services.
- Complexity: The changes to the Internal Revenue Code may create confusion and require additional administrative burden.
- Uneven Distribution of Benefits: Higher-income individuals may benefit more from increased contribution limits.
- Risk of Reduced Insurance Coverage: Individuals may opt for HSAs over more comprehensive insurance plans, leading to gaps in coverage.
- Potential Strain on Government Resources: Increased HSA usage could impact tax revenues.
Constitutional Alignment
The bill primarily deals with taxation and healthcare, areas where Congress has broad authority under Article I, Section 8 of the Constitution, which grants the 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. The expansion of healthcare options and financial tools does not appear to infringe upon individual liberties or rights protected by the Constitution.
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).