Health Savings Accounts Caught in Crosshairs of the Enhanced Premium Tax Credit Debate

By William G. Stuart | Originally posted by Health Savings Academy

An article defending Enhanced Premium Tax Credits takes aims at Health Savings Accounts.

Earlier this week, I came across an article that repeated some of the same tired criticisms of Health Savings Accounts. It was produced by the Center on Budget and Policy Priorities, a think tank whose policy positions fall to the far left of the political spectrum. Nothing wrong with that. But it's important to note in any discussion of Health Savings Accounts, which generally are disparaged by politicians and policy analysts on the left. This despite the fact that the original three champions of Health Savings Accounts in the Senate were all Democrats.

The article focused on the Enhanced Premium Tax Credits (EPTCs) over which the federal government has shut down for six weeks. The Affordable Care Act established premium tax credits for individuals and families that earn between 100% and 400% of the federal poverty level (FPL) and purchase nongroup coverage through a state-facilitated marketplace. The law was later interpreted by the Supreme Court to permit the same credits through federal-facilitated marketplaces, which represent most of the public exchanges today.

In 2021 and 2022, a Democrat Congress and president twice passed legislation temporarily enhancing the EPTCs for individuals and families below 400% of FPL and introducing credits for shoppers with incomes up to 600% of the FPL. These enhancements were made temporary because Democrats could not pass either piece of legislation through their own party without reducing the overall spending in each multi-trillion-dollar bill. They decided to make the EPHCs temporary, rather than permanent, to include other, higher-priority spending in the two bills.