The One Big Beautiful Bill Act (OBBBA) – The Big and Beautiful The bill, enacted in July, expands eligibility and uses for Health Savings Accounts (HSAs), offering more flexibility to save and invest tax-free money to cover medical expenses. HSAs allow policyholders to get tax deductions on contributions made, grow invested money tax-free, and make tax-free withdrawals for qualified medical expenses. The OBBBA also made permanent the use of telehealth and other remote services before reaching the deductible of a high-deductible health plan (HDHP), maintaining the right to contribute to an HSA for plans starting on or after January 1, 2025. Beginning in 2026, bronze and catastrophic plans available through insurance exchanges will be considered HSA-compatible, even if they don't meet the traditional definition of an HDHP. This will allow more people enrolled in high-deductible plans to contribute to their HSAs. HSA. Those enrolled in direct primary care (DPC) services will also be able to use tax-free funds from their HSA to pay the recurring fees for these services.

These measures come as Congress debates extending Obamacare's enhanced subsidies, which expire later this year. Democrats are seeking to extend these subsidies, while some moderate Republicans believe the extension is key to keeping health care affordable.

Senators Mike Crapo (R-Idaho) and Bill Cassidy (R-Louisiana) introduced a proposal that would redirect subsidy funds into HSA accounts, offering $1,000 to participants ages 18-49 and $1,$500 to those between 50 and 64 years old.

Submitted to a vote

The Senate is expected to vote on the Patient Care Freedom Act on Thursday. If the vote fails, a three-year extension of Obamacare subsidies will be considered, although both proposals could fail, opening the possibility of a bipartisan compromise.