Neal Statement on GAO Report Confirming Health Savings Accounts are No Substitute for Affordable Coverage
WASHINGTON, DC—Ways and Means Committee Ranking Member Richard E. Neal (D-MA) released the following statement today after the Government Accountability Office (GAO) issued a new report confirming that Health Savings Accounts (HSAs) are not a replacement for affordable health coverage:
“For 15 years, Republicans have wasted everyone’s time promising to repeal the ACA, and with what? We still don’t know. As they scramble to come up with a plan, they’re pretending HSAs can do the job. But as evidenced in a new GAO report, HSAs are no substitute for robust health insurance—they’re just another tax break for the wealthy.
“Most HSA accounts have less than $1,000 in them—hardly enough to cover an emergency or the astronomical deductibles that go along with HSAs. And at a time when the people are being socked with higher costs everywhere they turn, they don’t have the resources to dedicate to HSAs. Rather they need a health care system with lower costs, not just a new place for those with money to hoard it tax-free.
“As Republicans push to yet again prioritize the well-off few, Health Subcommittee Ranking Member Lloyd Doggett will lead critical legislation that finally puts guardrails on these accounts and protects consumers. Concepts of a plan aren’t going to cut it. Republicans must work with us to extend the expanded premium tax credits and deliver the affordable coverage people count on.”
Ranking Member Neal requested GAO track the financial impact of HSAs on consumers, and today’s report is the product of that request.
Key Findings
- Nearly twice the share of individuals in the highest income group (an estimated 62 percent) had tax-advantaged accounts compared with the lowest income group (an estimated 32 percent).
- HSAs often come with recurring fees that chip away at account balances unless consumers maintain a high enough balance (typically a few thousand dollars).
- HSA providers don't always disclose these fees until enrollment, and officials from HSA providers even agreed that many fees are unnecessary.
- Interest rates on non-invested balances are paltry—only on par with traditional checking accounts.
- In fact, consumers with lower balances easily lose out because monthly fees outweigh any earned interest.
- Most accounts have low balances—with invested HSAs holding a disproportionate share of assets.
- As of December 31, 2022, an estimated 7 percent of HSAs had balances over $10,000, and 63 percent had balances less than $1,000, including 21 percent of accounts that had zero balance.
- In each year from 2019 through 2023, individuals who invest at least a portion of their funds held a disproportionate share of total HSA assets. For example, in 2023, only 8 percent of HSAs were invested, but these accounted for an estimated 38 percent of all HSA assets, according to a Devenir Research report.
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