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For Immediate Release
Office of the Press Secretary
August 9, 2004
Fact Sheet: Expanding Access and Increasing the Affordability of Health Insurance Through Health Savings Accounts
Millions of Americans will get help with their out-of-pocket medical expenses through President Bush's support of health savings accounts (HSAs). The Medicare bill that President Bush signed into law establishes new tax-free savings accounts for individuals and groups who purchase affordable high-deductible health plans. Businesses and individuals who take advantage of these accounts will save substantial sums on health insurance premiums and gain more control over health care expenditures. The tax-free, portable accounts will help families pay their routine medical expenses and provide a tax-preferred means of saving for future health care needs.
New health insurance deductions will make coverage more affordable to millions of Americans whose employers don't provide health benefits. The President's proposal will allow individuals who establish HSAs to deduct the premiums they pay for their low-premium, high-deductible health insurance policies. This new deduction will be available to taxpayers whether or not they itemize. It will reduce the net cost of these policies and encourage the use of HSAs for saving for health care needs and making wise, cost-effective health care choices.
Tens of thousands of individuals already are saving on their health care costs through HSAs. These accounts can save families thousands of dollars on their health insurance premiums. Individuals can deposit some or all of these savings into their tax-free accounts and use the money for current health care needs and to save for future medical expenses. Employers also can contribute to these accounts, which the employee controls. Instead of sending more money off to insurance companies in the form of higher premiums, families can keep their savings in an account that belongs to them, not to their employer or to an insurance company.
Americans from all income levels are taking advantage of HSAs. eHealthInsurance, an Internet-based insurance brokerage that offers coverage in the individuals and small firms throughout the country, last week published an analysis of people who had purchased HSAs through its internet portal over the first six months of this year. Key findings of small sample include:
HSAs provide a much more affordable, consumer-friendly product for businesses to offer their employees.
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