Andrew Keshner

Sat, May 17, 2025, 5:00 AM7 min read

While Republicans decide how far to go with funding cuts and tighter restrictions for low-income healthcare coverage, they want to broaden rules for accounts designed to pay medical bills — which double as a retirement-planning tool that can give wealthier households a leg up.

The tax bill that advanced from the House Ways and Means Committee this week is hundreds of pages long, but it devotes a portion of provisions to health-savings accounts.

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People could put more money in these tax-advantaged accounts and working seniors would have more time to contribute, according to the bill. It would also widen the types of healthcare plans able to use these accounts and let users pay for their gym memberships with account money, among other things.

“If passed, it could help higher-income clients shelter more income and give younger families and small-business owners more room to save aggressively for (inevitable) future healthcare costs,” wrote Craig Toberman, partner at Toberman Becker Wealth in St. Louis.

The GOP’s tax bill is “taking one of the most tax-efficient retirement-planning vehicles and just jump-starting it even further,” Toberman added in a phone interview with MarketWatch.

Over 39 million HSA accounts had almost $147 billion in assets by the end of last year, according to Devenir, an investment-solutions provider for HSA accounts. The 2024 collective asset balance was up almost 19% from the prior year, Devenir data showed.

Yet the potential changes to HSAs are among the latest developments in the recurring story of rising healthcare costs in the U.S.

The GOP tax and spending bill is not a done deal — not by a long shot. One reason is the debate raging on Medicaid funding and eligibility requirements. Democrats and other critics say millions of Americans could unfairly lose their health coverage, while GOP advocates say the program’s costs have to come under control.