Personalized Care Act of 2025
Sponsored By: Senator Ted Cruz
Introduced
Summary
This bill would dramatically expand Health Savings Accounts (HSAs) by widening who can open and contribute to them, sharply raising contribution caps, and letting HSAs pay for more kinds of health care and fees.
Show full summary
- Families could save and use far more HSA money. Contribution limits would rise to $10,800 for self-only coverage and $29,500 for family coverage, indexed for inflation, and HSAs could be used to pay health insurance premiums and direct-care fees.
- People covered by government plans would become eligible. Those with Medicare Part A and B, Medicaid, the Children’s Health Insurance Program, certain military and government employee plans, and Indian Health Service or tribal programs could open and contribute to HSAs even without a high-deductible plan.
- Health care sharing ministry participants and other alternative-plan enrollees gain access. Membership fees and certain amounts paid by ministry participants would qualify as medical expenses. The penalty for nonqualified HSA distributions would be reduced to 10 percent, down from 20 percent.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 4 benefits, 0 costs, 0 mixed.
Higher HSA contribution limits
If enacted, you could contribute up to $10,800 to an HSA for self-only coverage and $29,500 for family coverage each year. These new limits would apply for tax years beginning after December 31, 2025. The bill also shifts the cost-of-living base year to 2025 for future HSA adjustments.
HSAs can pay ministry and prepaid care
If enacted, HSA funds could pay for more kinds of medical costs starting in tax years after December 31, 2025. That would include periodic provider fees, prepaid amounts for screening, diagnosis, treatment, and wellness, and qualifying health care sharing ministry membership and administrative fees. Some of these payments could also be deductible as medical expenses when you itemize.
More people can use HSAs
If enacted, you could be eligible for an HSA if you are covered on the first day of a month by a long list of plans. Covered plans would include group or individual plans, short-term plans, Medicare Parts A or B, Medicaid, CHIP, TRICARE, certain VA programs, Indian Health Service care, and qualifying health care sharing ministries. The bill would also change tax-code references so these new coverage rules apply where the code previously required a 'high deductible health plan', and it clarifies some technical exclusions for classification of ministries and fixed periodic-fee arrangements.
Lower penalty on HSA withdrawals
If enacted, nonqualified HSA withdrawals made in tax years after December 31, 2025 would face a 10% penalty instead of 20%. That would reduce the excise tax you pay when HSA money is used for nonmedical purposes.
Sponsors & CoSponsors
Sponsor
Ted Cruz
TX • R
Cosponsors
Roger Marshall
KS • R
Sponsored 1/28/2025
Ashley Moody
FL • R
Sponsored 1/8/2026
Roll Call Votes
No roll call votes available for this bill.
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