Policy proposal to reverse chronic disease

‍THE PROBLEM

‍Americans’ access to needed medications and health services is shrinking, thanks to rising medical prices and ever-higher copays and deductibles — and intrusive insurance-company meddling. Despite having health insurance, far too many families are just one injury or surprise illness away from a financial crisis.Thankfully, there’s a proven way to address these problems, and that is to let Americans save and pay for out-of-pocket medical expenses, tax free, with a special savings vehicle like a Flexible Spending Arrangement (FSA) or Health Savings account (HSA). These popular tools give patients a tax break on every medical purchase while promoting personal choice and responsibility. They also combat medical inflation by encouraging patients to shop for value.Unfortunately, under current law, FSAs have a “use it or lose it” rule — unspent funds go back to the employer at the end of the year — and HSAs are available to just 10-20% of Americans.

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THE SOLUTION

‍The bipartisan Health Out-of-Pocket Expense Act, or HOPE Act, H.R. 9394, introduced by Rep. Blake Moore, R-Utah, creates a new option — the HOPE Account — that empowers patients (rather than insurance companies) in a compassionate and fiscally responsible way.Under the HOPE Act, all insured Americans (including employees, seniors, veterans, Native Americans, Medicaid enrollees, and people with private coverage) are allowed to save and pay for out-of-pocket medical expenses (including copays, deductibles, and medicines) tax-free.MORE SECURITY: Unspent funds roll over from year to year and may be saved or invested for a rainy day. The money in your account is your personal property.MORE CHOICE: A person may use HOPE account funds for medical services and providers that his or her health plan does not cover.MORE AFFORDABILITY: An individual may contribute up to $4,000 a year (a family, up to $8,000), increased annually for the cost of living. Interest earnings are tax-free, as are withdrawals for qualified medical expenses. Non-medical withdrawals are taxable and incur a 30% penalty tax.

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EXTRA HELP:

While contributions are not tax-free, employees who make less than $100,000 a year (families, $200,000) may receive tax-free contributions from employers and state programs worth up to half their yearly contribution limit.TAXPAYER-FRIENDLY: The bill prohibits an individual from contributing, during the same month, to both a HOPE account and an HSA or HRA (Health Reimbursement Arrangement). This reduces revenue loss while leaving families free to choose the savings tool that is best for them.