Why HSA Contribution Limits Should Be Higher

Why HSA Contribution Limits Should Be Higher

HSA-Contribution

A Health Savings Account (HSA) has many benefits, the biggest of all being that consumers with one can use tax-free money that they have contributed to this type of fund to pay for a wide range of qualified medical expenses. Furthermore, if this money is not used it rolls over from year to year and can become a very beneficial and high-value account to access during retirement. Not only can you contribute to your HSA, but your employer can as well.

Unfortunately, one of gripes of an HSA is that there is a maximum contribution limit from year to year. In 2015, it increases to $3,350 – for individuals with qualifying high deductible health plans (HDHP). For a family with an HDHP, the contribution limit is $6,650. These numbers increased by only $50.00 in 2015, and for the individual plan only.

The Reasons to Increase HSA Contribution Limits

It’s a common understanding that there’s no way to predict your future medical expenses or the state of your health – or your loved ones – for that matter. With that said, why are the limits so low? While HSAs are a great investment and offer many benefits, consumers can truly benefit from a real increase in HSA contributions for the following reasons:

  • Because most people carry health insurance plans with higher deductibles than ever, there is a great need use the money that is in your HSA. Higher contribution limits can help people build their accounts back up when they’ve had to make withdrawals.
  • Those with already high medical expenses, who may continue to have them in the future, can better plan and prepare for the high costs of medical care.
  • Medical expenses during retirement can average $220,000 for a couple. Everyone should have the opportunity to save this much in their HSA, but at current contribution limits this can be very difficult.

Ways to Encourage Change

It’s essential that as health care consumers we work together to make changes that can truly benefit all. Millions of people now have HSA-qualified health insurance plans, and higher contribution limits are a great way to give the middle-class incentive to save for future medical expenses. As individuals and families grow the amounts in their HSAs they should also be allowed to move to higher-deductible health insurance plans, enabling to keep their monthly premiums down.

Ultimately, more money in HSAs means more power to the consumers. If we ever hope to keep medical costs under control, it is by putting the spending decisions in the hands of the consumers. Let’s do all we can to make HSAs more beneficial for all.

What do you think? What should the contribution limit be for HSAs?

Wiley Long

Wiley Long

Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.
Wiley Long