MAY 3, 2006 -- Rep. Eric Cantor, R-Va., introduced legislation (HR 5262) on Wednesday that would provide tax incentives on premium payments and contributions for high-deductible health savings accounts (HSAs), including a tax credit of up to $3,000 for purchases by low-income families.
The Tax-Free Health Savings Act, which Cantor introduced at a news conference with Treasury Secretary John W. Snow, aims to make HSAs more attractive to consumers by providing income-tax credits on premiums and contributions, as well as by making premiums for HSA-compatible insurance tax deductible.
"For years, people in Washington have been looking for a solution to achieve universal health coverage," Cantor said in a statement. "Rather than forcing a one-size-fits-all government program on workers and families, the Tax-Free Health Savings Act empowers individuals with making their own health care decisions."
The announcement comes shortly after Monday's American Hospital Association meeting where President Bush urged Congress to approve various proposals that he said would make health care affordable, including Cantor's bill.
In his speech, Bush lauded HSAs, saying, "When patients and consumers see how their health care dollars are spent, they demand more value for their money. The result is better treatment at lower costs."
In response to Bush's call to promote HSAs, House Minority Whip Steny H. Hoyer, D-Md., said in a statement that HSAs "will undermine traditional group insurance and discourage American families from seeking important preventative care."
According to Snow, more than 3 million U.S. residents—"a large portion of whom were previously uninsured"—are covered under HSA-qualified plans.