Health Savings Accounts (HSAs) have been around for almost two decades, but many people are still unfamiliar with their history and how they came to be. In this blog post, we will take a quick look at the history of HSAs and how they have evolved over the years.
HSAs were first introduced in 2003 as part of the Medicare Prescription Drug, Improvement, and Modernization Act. The purpose of the HSA was to provide a way for individuals to pay for qualified medical expenses with pre-tax dollars. HSAs were designed to be paired with high-deductible health plans (HDHPs) and were intended to encourage individuals to take more responsibility for their healthcare expenses and to shop around for the best prices.
In the years that followed, the contribution limits for HSAs increased and the list of qualified medical expenses expanded to include things like telemedicine and over-the-counter medications.
In recent years, HSAs have become increasingly popular, with the number of account holders and the amount of money in HSAs both on the rise. At the end of 2022, there were over 35 million health savings accounts, and the total amount of money in HSAs reached $104 billion. More account holders are investing their HSA as well, with more Americans utilizing the HSA as a savings vehicle for healthcare expenses in retirement and capitalizing on the tax-free growth HSAs can offer. Overall, the history of HSAs is one of evolution and growth. HSAs have become an increasingly popular and versatile way to save money on healthcare expenses, and they continue to evolve to meet the changing needs of consumers.