Personalized Care Act of 2025
Personalized Care Act of 2025
Plain Language Summary
# Personalized Care Act of 2025 - Plain Language Summary **What the bill would do:** The Personalized Care Act would make it easier and more attractive for Americans to use Health Savings Accounts (HSAs)—tax-advantaged accounts designed to help people save money for medical expenses. Currently, you can only contribute to an HSA if you have a high-deductible health insurance plan. This bill would eliminate that requirement, allowing people with any type of health insurance (including Medicare, Medicaid, or short-term plans) to open and use HSAs. It would also nearly double the amount people can contribute annually to these accounts, from $4,300 to $10,800. **Who it affects and key changes:** This bill primarily affects individuals looking for tax-friendly ways to pay for healthcare costs.
It would expand eligibility to include participants in health care sharing ministries and people covered by various government health programs. The bill also broadens what counts as a qualified medical expense for tax purposes, potentially allowing deductions for a wider range of health-related costs. **Current status:** The bill was introduced by Rep. Chip Roy (R-Texas) in the 119th Congress and is currently in committee, meaning it has not yet been debated or voted on by the full House of Representatives.
CRS Official Summary
Personalized Care Act of 2025This bill expands health saving account (HSA) eligibility, increases HSA contribution limits, and makes other HSA-related changes. The bill also expands the definition of medical care for purposes of the itemized tax deduction for unreimbursed medical expenses.The bill eliminates the requirement that an individual must be covered by a high-deductible health plan to establish and contribute to an HSA. Under the bill, an eligible individual is defined as (1) a health care sharing ministry participant, or (2) individual covered undera group or individual health plan;health insurance (including a short-term limited duration and medical indemnity plan); ora government plan (including Medicare Part A and B, Medicaid, the Children’s Health Insurance Program, certain military and government employee health benefit programs, and the Indian Health Service and tribal organization programs).The bill increases annual HSA contribution limits to $10,800 (from $4,300 in 2025) for self-only coverage and $29,500 (from $8,550 in 2025) for family coverage, adjusted annually for inflation.The bill expands the qualified medical expenses that may be paid for with HSA distributions to include health insurance payments (e.g., premiums), direct care fees, and certain amounts paid by health care sharing ministry participants.The bill decreases the penalty to 10% (from 20%) for nonqualified HSA distributions. Finally, under the bill, direct care fees and fees paid for membership in a health care sharing ministry qualify as medical care for purposes of the itemized tax deduction for unreimbursed medical expenses.
Latest Action
Referred to the House Committee on Ways and Means.