Sens. Cruz, Braun Introduce Legislation to Provide Greater Health Care Freedom

Personalized Care Act Expands Health Savings Accounts

WASHINGTON, D.C. – U.S. Sens. Ted Cruz (R-Texas) and Mike Braun (R-Ind.) this week introduced the Personalized Care Act (PCA), legislation to make Americans’ health care more portable, accessible, and tailored to meet their unique needs by dramatically expanding Heath Savings Accounts (HSA) – a pre-tax savings tool millions of Americans use to cover the costs of their health care.

Upon introducing the legislation, Sen. Cruz said:

“The pressure to change the health care status quo is rightfully building, and the key question is whether Congress will use this pressure to finally create a true free market health care system or build on the failures of Obamacare. As Democrats push for full government control of America’s health care system, I’m fighting to put patients and their doctors back in control of their health care, instead of Washington bureaucrats. By expanding this important savings tool, the Personalized Care Act increases portability, expands access, makes it easier to save for the costs of health insurance premiums and medical care. The commonsense, consensus reforms in this bill will give millions of Americans the freedom to make the health care choices that best meet their needs, moving America way from a federal health care takeover and toward a patient-centered system.”

The PCA would:

  • Expand HSAs to Millions of Americans. PCA decouples HSAs from high deductible health insurance plans (HDHP), and expands HSAs to Americans in all major medical health insurance plans and government health programs (Medicare, Medicaid, CHIP, etc.), as well those participating in other present and future innovative forms of healthcare financing, like healthcare sharing ministries, short-term limited-duration plans, and medical indemnity plans.
  • Increase HSA Contribution Limits. Increases HSA contribution limits from $3,550 (2020 limit) to $10,800 (PCA) for individuals and from $7,100 (2020 limit) to $29,500 (PCA) for families.
  • Allow HSAs to Pay for Healthcare Premiums. Allows individuals and families to use their HSAs to pay for health insurance premiums.
  • Allow HSAs to Pay for Direct Primary Care and Other Direct Medical Care Arrangements. Allows account holders to use HSAs to pay for periodic fees for direct primary care or other direct medical care.  Ensures that such arrangements are treated as qualified medical expenses, not secondary insurance plans.
  • Allow HSAs to Cover OTC Medicines and Repealing the Enhanced Penalty For Nonqualified Distributions. Expands HSAs to cover over-the-counter medicines. Repeals the 20 percent enhanced penalty for nonqualified distributions from HSAs, implementing a lower 10 percent penalty.
  • Allow HSAs to Pay for the Costs of Healthcare Sharing Ministries and Arrangements. HSAs may be used to pay for healthcare sharing ministries and their associated administrative fees.  (Healthcare sharing ministries and arrangements do not label these costs as “premiums,” but as sharing payments and administrative fees.)

Read the full bill here.