This post sponsored by Saatva, the official mattress and restorative sleep provider of Team USA! 👇 🛏

**Disclaimer: All opinions and ideas expressed in this article are solely mine and none represent a recommendation or should be viewed as advisement of any kind to anyone to do anything.*

Health Savings Accounts (HSAs) now hold about $159 billion in assets by mid-2025 (16% higher than in 2024). If you’re not thinking about how this shifts patient behavior and impacts where healthcare innovation is happening, you’re missing a major market force.

HSAs are a financial asset that provides funding for about 17-18% of the population’s healthcare costs as of 2025. That’s over 59.3 million Americans and about 40 million HSA accounts.

Few individuals use the HSA as a financial asset by investing it in the stock market (about 4 million people do this). The HSA is the only triple tax advantaged account. It’s never taxed if used for healthcare expenses.

The other >95% of those with HSAs either don’t know they can do this or intentionally keep them liquid to pay for immediate medical costs. That seems to track with who holds HSAs. About 64% of HSA holders live in zip codes with median household incomes below $100,000.

Interestingly, Millennials hold about 30% of HSA accounts.

Republicans generally like the idea of putting spending decisions about healthcare in the hands of individuals themselves. They support consumer-driven healthcare, and this fits. Why?

They largely believe skin in the game changes behavior and that market competition is accelerated by price transparency. They believe in personal ownership/responsibility, and the HSA combines tax policy with healthcare policy.

HSAs are available when your insurance coverage is a high deductible health plan (HDHP). As the name implies, there’s a high deductible. There’s also often higher copays.

As part of the One Big Beautiful Bill, or the Working Families Tax Cuts Act of 2025, all Bronze and Catastrophic plans on the ACA marketplace are HSA-compatible, and annual contribution limits have increased. They are now $4400 for individual contributions and $8750 for families.

Broadly speaking, Democrats prefer the approach of comprehensive coverage and lower costs at the point of care, like low co-pays and deductibles, which they believe encourages individuals to seek healthcare sooner and more upstream. That doesn’t mean Democrats don’t support or use HSAs. As you’ll see, there’s a lot of nuance around them.

The below framework was shared by the White House in January of 2026. Notably, the Consolidated Appropriations Act of 2026 does not address these asks. Some wonder about a second Budget Reconciliation package this year. We’ll have to wait and see.

You may agree with one side or the other, or you may be like me and see the positives in each.

My personal take: I love the HSA as an investment vehicle but do believe it can have the unintended consequence of discouraging upstream care. I also have concerns that it is often confused by consumers as something that could replace or pay for insurance, which it cannot (except in the case of future Medicare premiums).

Wherever you stand on HDHPs and HSAs, they are creating a market shift worth understanding if you work in healthcare.

The widespread and growing adoption of High-Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs) is fundamentally impacting the business of healthcare. Note that idividual behavior often changes when they have higher deductibles.

Some Impacts of the Proliferation of HDHPs and HSAs

Some businesses have been born and thrived because of the HDHP/HSA structure. Price transparency platforms are a good example of this, as are Direct Primary Care models, which are now HSA eligible.

There’s also a growing number of businesses with some version of curating products that are HSA eligible. There are even companies that facilitate the letter of medical necessity completion. They simplify the spending process and let consumers easily put that HSA debit card to work.

AI-driven navigation is also growing, as payers and employers are using AI more and more to help employees predict their healthcare spending, choose the right plan, and automate the process of managing medical receipts needed to use the HSA dollars, either now or in the future (HSAs can be kept indefinitely in investment accounts and spent years in the future. Those receipts from 2025 can be used to withdraw money in retirement, for example.

Some Business Types enabled by HSAs:

In some cases, HSAs changed what kinds of healthcare businesses can succeed.

On one hand, HDHPs and their corresponding HSAs are chosen by those who don’t have another choice. They typically have the lowest premiums in exchange for requiring more cost-sharing with beneficiaries.

On the other hand, they are also chosen intentionally by those who are either planning for early retirement or who consider themselves part of the “FI” Community.

The HSA is a very generous savings vehicle. Why?

The money is put in tax-free, not deferred.

Once you own it, you always own it.

It grows tax free.

If and when you withdraw it, you withdraw it tax-free for healthcare expenses. Forever.

If you use it to pay Medicare or Medicare Advantage premiums, that’s also tax-free, even though it can’t be used under 65 to pay insurance premiums unless you are on Medicare.

Oh, and if you withdraw from it after 65, you pay only income tax on it. You might need to do that if you hadn’t been diligently saving your receipts, but even that is a pretty darn good deal.

If you must withdraw it before 65 and don’t have receipts to use so it’s tax-free, you will pay a 20% penalty. In the “FI” community, this is not so common. But even if you do, that means it effectively becomes an addition to your traditional 401k or traditional rollover IRAs.

As noted, it’s investible. Employers often offer similar mutual funds for HSA investing as they do for 401k investing.

Employers usually match at least a small portion of the money you contribute per paycheck. That money you choose to invest in the HSA can be thought of as “in lieu of” the higher payroll deductions of a PPO or other traditional plan. Except in the case of PPO payroll deductions, HSA deductions are yours as long as you want or need.

You can choose to pay cash for your healthcare expenses as you spend. An important point that I find many folks don’t realize: if you save your receipts (I save mine as a jpeg picture in Notion), you can submit those receipts anytime in the future to withdraw money from your HSA if you need it with no penalty.

Here’s an example of how I, and many others, use their HSA 👇

I max out my contribution every year and max out the employer match.

I have a bi-annual specialist appointment. I use a provider in-network with my plan (but my HDHP has out-of-network benefits just like the PPO option, which is as non-negotiable for me) for those check-ins.

I pay the negotiated rate my insurance carrier has with the practice, which is very reasonable—and of course I pay on a credit card where I get 2 points for every dollar! 😀

I save the receipt in Notion.

I leave my HSA invested in several mutual funds and have liquid assets to cover my in-network and out-of-network deductibles and “out of pocket maximums” for my health plan in the unlikely but always possible event I have an unforeseen major medical event.

How early retirees think about HDHPs and the HSAs 👇

Retirement before Medicare age is common, either by choice or otherwise. About 50% Americans retire before age 65, and 11% retire between 55 and 59. The average age is 62.

Here’s where the Affordable Care Act (ACA) Premium Tax Credit comes in.

The Affordable Care Act Premium Tax Credit is alive and well, even though the Enhanced Advanced Premium Tax Credit has expired.

To qualify for the Premium Tax Credit, your household income must generally fall between 100% and 400% of the Federal Poverty Level (FPL). But if your income exceeds 400% FPL by even $1, you are ineligible for any federal premium subsidies.

(Table generated by Gemini)

I’m simplifying to keep this post from becoming a novella 😁. There are specifics for Medicaid expansion states, additional cost-sharing reductions, and regional differences. There are also state-specific subsidies. In my home state of New Jersey, for example, they have state-level Health Plan Savings for households with incomes up to 600% FPL.

For someone planning to retire early (before age 65), or for someone who is retired early and needs health insurance, the Premium Tax Credits can be used strategically. If an individual has little or low W2 or 1099 income and is funding their life on investments and cash where their tax burden is low, they can often access at least part of the Premium Tax Credit when they enroll in a qualifying ACA Marketplace plan.

If they choose, their HSA investments can be used to reimburse themselves for health-related expenses tax-free during these years while limiting investment withdrawals that will trigger taxable events.

Some in the “FI” community plan so strategically about their sources of “under 65 income” that they have to be sure their “income” is high enough so they don’t accidentally end up qualifying for Medicaid!

HDHP/HSA Supporters

Some love the HSA because it fits their political leanings.

Some love it because it’s an additional, powerful investment vehicle.

Some love it because it’s part of their “Financial Independence Retire Early”/”FIRE” plan.

Some love it because it is part of the ACA Marketplace plan options, giving low income Americans access to health insurance.

You can love it and also have concerns that it’s sometimes presented as an alternative to health insurance. It is firmly NOT an alternative to health insurance. But perception is powerful, and misinformation is hard to distinguish from fact.

Whether HSAs expand dramatically or plateau, they’ve already reshaped healthcare markets in ways most clinicians and health tech professionals don’t fully appreciate. Understanding them is part personal finance education and part understanding how healthcare actually works for millions of patients and where the next wave of innovation is headed.

More resources on HDHPs and HSAs can be found on many podcasts. I link a few in my Timeless Autonomy Resources site. Below are two excellent books I own by approachable financial independence enthusiasts who talk about HDHPs and HSAs from the personal finance lens, among many other personal finance topics, if that interests you!

If you are aspiring to transition into a non-clinical role or your goal is a promotion in a clinical or non-clinical role, don’t underestimate this deceptively simple and powerful strategy 👇

Standout from Everyone Else

Don’t overthink this.

Here are a bunch of suggestions you can implement immediately.

But first, what NOT to do! Don’t participate in negative conversations or complaining. This needs no explanation. This is the last way you want to standout!

Come to work 15 minutes early to do a task that helps someone. Make someone’s day a little better.

Find problems that need solutions and deliver the solution when you surface the problem. Don’t wait for permission. If you see a gap in how your organization addresses a business challenge, write a brief memo with recommendations. Consistently show that you think beyond your job description.

Build relationships across other departments. Invest in relationships continuously. Note: this doesn’t mean asking people for things! Have coffee with people in departments like finance, IT, operations, and strategy. The goal? Understand their challenges. Look for ways your unique combination of knowledge, skills, and expertise could help them.

Read what healthcare and health policy leaders read rather than just clinical journals. Health Affairs and KFF are great places to start. Remember, everything in healthcare starts with health policy. Nothing and no one influences the business of healthcare more.

Translate jargon in both directions. If you want to be exceptional and be known for it, don’t just flex to understand the business of healthcare. Actively translate it for others. You are indispensable if you can objectively explain what the CFO means for frontline staff and what clinicians need in ways executives appreciate and are incentivized to care about. Along those lines:

Know the annual goals of your manager, their manager, the head of your part of the organization, and the CEO. That will help you understand what they care about. Often for manager or directors and above, annual goals are tied to compensation. The higher up you get, the more is tied to bonus and/or equity. That has a major impact on what they care about.

Ask for feedback, and then implement the suggestions. Demonstrate that visible improvement and you also demonstrate self-awareness and an orientation towards growth. You will also be seen as someone leaders want to work with.

Be the person who everyone knows can bridge silos. Connect people, share information across departments, and facilitate collaboration. Leaders notice who makes an organization work better.

Develop competency in skills that complement clinical expertise. Most of this you can get in free online education. Health economics, data analytics, project management, strategic planning, health policy, and more. Competency, not certifications, are what matter in non-clinical work. The indispensable employee is the one who can do many things well and work with a high level of agency.

And if your work environment doesn’t support the ability to stand out, you may want to consider whether or not remaining with your employer aligns with your career and financial goals.

Check out my free resources page!

Read this post by Cody Lee, PT, DPT about creating value beyond patient care and systems thinking for clinicians who are interested in non-clinical career growth 👇

Read my article for OT Potential on how clinicians get paid 👇

Listen to this 5-minute YouTube clip on HSAs by The Money Guy Show 👇

*Disclaimer: All opinions and ideas expressed in this article are solely mine and none represent a recommendation or should be viewed as advisement of any kind to anyone to do anything.*