As Republicans Plot Latest Health Rollback, Rep. Doggett Introduces HSA Consumer Protection Legislation
November 20, 2025
Without substantial reforms, HSAs will continue to benefit the wealthiest few at a decade cost of nearly $180 billion
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Washington, D.C.—Today, U.S. Representative Lloyd Doggett (TX-37), Ranking Member of the Ways and Means Health Subcommittee, introduced the Health Savings Accounts (HSA) Consumer Protection Act to prevent the misuse of these accounts and to implement consumer protection guardrails against misleading junk fees. As they seek to undermine the Affordable Care Act, Republicans are promoting expanded HSA tax shelters that benefit the wealthy, while tying working families to high-deductible plans that can leave many unable to afford a visit to the doctor. While an independent analysis found that nearly 60% of the value of ACA tax credits benefit families earning 200% or less than the federal poverty line (about $64,000 for a family of four); nearly half of the value of HSAs benefit households earning over $200,000.
“Our health care system is riddled with loopholes to benefit those at the top while doing little for most Americans,” said Rep. Doggett. “Denying health coverage to 15 million Americans and spiking insurance premiums on millions more, Republicans are now offering more help to their wealthy contributors through HSA tax shelters. Meanwhile, most Americans do not have enough savings to afford emergency care, let alone pay an HSA sky-high deductible. My bill seeks to establish reasonable guardrails to prevent waste, fraud, and abuse, and to ensure HSAs deliver more Health, not just more tax shelter for the Affluent.”
HSAs are triple tax-advantaged accounts, meaning contributions are made with pre-tax income, assets grow tax-free, and distributions are tax-free if used for qualified medical expenses or as reimbursements for such expenses. HSAs have quickly become a lucrative tax shelter for wealthy Americans, with individuals earning $1 million or more the most likely to make individual contributions, and individuals earning $500,000-$1 million the most likely to receive employer contributions. Despite ‘health’ being in the name, HSAs are subject to few restrictions and have been promoted as a lucrative tool to pay for a vacation, a sauna, home renovations, or even a boat. Meanwhile, HSAs are paired with high-deductible health plans, leaving many consumers with inadequate coverage and often subjecting them to surprise junk fees.
A new, nonpartisan U.S. Government Accountability Office (GAO) report released today found that wealthy, healthy, and White and Asian households are more likely to have an HSA. The GAO also found that associated fees were often waived for account holders who maintained a certain balance, such as $3,000. Yet 63% of accounts had a balance of less than $1,000, including 21% of accounts with no balance whatsoever. For low-income households, HSAs can become a burden with junk fees to maintain an account to which they cannot afford to contribute. As Trump and some Republicans once again demand repeal of the ACA, this timely report exposes the deficiencies of their proposed replacement shifting more Americans into HSAs.
The HSA Consumer Protection Act would:
- Remove the exception that permits HSA use for non-health care services without penalty at age 65. Currently, withdrawals can be used for any purpose, with no penalty, including day-to-day expenses, a vacation, a boat, or home renovations.
- Place income limitations around the payroll tax exemption for HSA contributions, so that HSAs cannot be used as an income tax shelter for wealthy individuals. There is currently no such limitation.
- Limit the window for reimbursement to two years from when a qualified medical expense was paid. Currently, accountholders can reimburse themselves for expenses incurred decades before—so long as they had an HSA at the time of the expense.
- Require individuals to substantiate that their distributions from HSAs are for qualified medical expenses. Currently, accountholders are not required to substantiate their expenses when withdrawing funds from their HSA, which is a break from requirements for other tax-preferred health accounts.
- Prevent waste, fraud, and abuse by strengthening guardrails protecting against the misuse of HSAs for non-qualified medical expenses.
- Ensure that institutions offering HSAs do not charge excessive fees and meet basic transparency requirements, including those related to the fees charged for opening and maintaining an HSA.
Issues:Healthcare