The Government Accountability Office (GAO) has published a report showing that health-savings accounts (HSAs) are overwhelmingly used by high-income earners. According to the analysis, individuals with higher incomes — and who are generally healthier — make far greater use of HSAs and capture the bulk of the tax benefits.
The report highlights that enrollees in HSA-eligible high-deductible health plans tend to have greater financial means. It says the tax perks built into HSAs work best for those already well off, since the value of reducing taxable income is larger when you’re in a higher tax bracket.
Lawmakers on both sides of the aisle reacted. Some Democrats argued the structure of HSAs amounts to “another tax break for the wealthy,” while some Republicans noted that the findings challenge claims that HSAs are broadly helping lower-income Americans.
HSAs are often promoted as a tool to boost consumer control of health care costs and provide savings flexibility. But this report raises doubts about whether they serve lower- and moderate-income Americans at the same rate. With rising health costs and policy debates around whether to expand or reform HSAs, these findings could influence future legislation.