Equitable Health Savings Accounts: Bridging the Left-Right Divide
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Description
Polarization of the two major political parties reflects in part their differing views of the value of reliance on market forces. The parties disagree as to whether government can play a useful role in setting ground rules for competition and redistributing resources from the wealthy to less well-off groups. On the progressive side are those who focus on egalitarian outcomes, and thus advocate for social policies that redistribute resources downward from the top economic rungs. On the market libertarian side are those who focus on efficiency and advocate social policies that minimize tax burdens and government intervention. Democrats are generally—and increasingly—more aligned with the former, while Republicans are generally more aligned with the latter. This left-right divide also characterizes debate over healthcare policy. One recent manifestation of this ideological divide is Republican advocacy for, and Democratic resistance to, Health Savings Accounts ("HSAs"). Current policy provides a tax deduction for contributions to HSAs made by individuals and families enrolled in certain high-deductible health insurance plans. Investment gains on funds in an HSA account are exempt from taxation; the accounts are intended to cover medical expenses and can be used for some other purposes as well. Republicans have made HSAs a centerpiece of various health reform plans, including proposals debated during their 2017 effort to repeal the Affordable Care Act ("ACX'), a 2018 bill endorsed by Republicans on the House Ways and Means Committee, and the healthcare reform agenda recently produced by the Trump administration. But Democrats remain steadfastly opposed to expanding HSAs on distributional grounds. They argue that HSAs primarily benefit higher-income people who are able to use HSAs as a vehicle for tax-preferred savings.
Source Publication
Sharing the Gains of the U.S. Global Economy: Proceedings of the New York University 70th Annual Conference on Labor
Source Editors/Authors
Charlotte Garden
Publication Date
2021
Recommended Citation
Estreicher, Samuel and Wallace, Clinton G., "Equitable Health Savings Accounts: Bridging the Left-Right Divide" (2021). Faculty Chapters. 482.
https://gretchen.law.nyu.edu/fac-chapt/482
