New Bill Would Allow Health Savings Account Use for Home Care Services

A new bill introduced in the House of Representatives would make it possible for patients to use a health savings account (HSA) for home care services.

The bill —H.R. 6813 or the Homecare for Seniors Act— was introduced Sept. 13 and is sponsored by U.S. Representatives Sam Johnson, R-Texas, and John Larson, D-Connecticut. It would amend the Internal Revenue Code of 1986 to allow tax-free distributions from HSAs to cover qualified home care services.

The term qualified home care means a contract that provides three or more services to a patient such as: assistance with eating, assistance with toileting, assistance with bathing, assistance with dressing, assistance with continence or medication adherence, according to the bill text.

The bill has already received support from the Home Care Association of America. The organization has urged members of Congress to co-sponsor the bill.

“Traditional government health care programs and our current system of institutional care cannot meet the needs of the tens of millions of elderly Americans who will require some form of assistance,” according to an HCAOA press release. “This is a common-sense way to improve access to the care many need to help them stay in their home for as long as possible and avoid institutionalized care.”

An HSA is a specific savings account that allows someone to set aside pre-tax money to pay for medical expenses. A person can contribute to an HSA if they have a high-deductible health plan, are not enrolled in Medicare and cannot be claimed as a dependent on a tax return.

This bill may be even further evidence of the interest in home care. Nearly 87% of adults over 65 years old want to stay in their current home and community as they age, according to an AARP survey from 2014. That number is only projected to grow, as by 2030 all baby boomers will be over 65.

Paying for home care services has historically been out-of-pocket.

Yet, other financial options have been popping up in the industry over the last year. In April, the Centers for Medicare & Medicaid Services (CMS) officially announced that non-skilled in-home services would be allowed as supplemental benefits for MA plans in 2019.

Rep. Johnson and Rep. Larson are both members of the House Committee on Way and Means. The Homecare for Seniors Act was referred to that committee.