Differentiators
What is the Homecare of Seniors Act or HR 6813?
HR 6813 (also known as the Homecare of Seniors Act) has created an opportunity for a health savings account (HSA) to help patients afford homecare services.
The bill was brought into the House of Representatives with bipartisan support and is intended to change the legislation in the Internal Revenue Code of 1986 so that qualified or competent homecare services can be paid for with the HSA’s tax-free distributions.
What qualifies as homecare?
Qualified homecare, as defined by the bill, refers to an agreement that makes certain services like…
•eating assistance
•bathing assistance
•dressing assistance
•medication assistance
•continence assistance
•toileting assistance
…available to patients who need them. Three or more services must be provided under this contract.
Who can we thank?
HR 6813 was introduced by Congresswoman Katie Porter (CA-45), Representative John Larson (CT-1) of the Democratic Party, Representative Adrian Smith (NE-3), and Representative Jackie Walorski (IN-2) of the Republican Party. Katie Porter also commented on the bill’s bipartisan support.
HSA Facts
The HSAs were created as a portion of the Medicare Prescription Drug, Improvement and Modernization Act in late 2003. A health savings account (HSA) is used to save pre-tax contributions that will be used to cover any and all medical bills.
A little-known fact about HSAs is that they can be invested. Like 401(k)s and Roth IRAs, HSA savings can be used to invest in mutual funds (broadly diversified, low-cost index). An HSA will also protect your investment return from taxes related to long-term capital increases and dividends.
HSA withdrawals, when used to pay for related medical expenses, are tax-free as well. This way, HSA funds are tax-free three times over (tax-free when contributed, tax-free when in the account and tax-free when withdrawn). This makes HSAs a great account for investing.
After contributors turn 65, they will be allowed to use the HSA funds for whatever they need without any sort of penalty. There will still be taxation at the normal income tax rate, but the HSA will function just like a 401(k). It will be tax-free twice over as well.
HSAs are a vast improvement when compared to the previous…
•Medical Savings Accounts (restricted to self-employed and small businesses)
•Health Reimbursement Arrangements (owned by employers) and
•Flexible Spending Accounts (must be used or lost in a year and replenished with additional funds)
Importance of the bill
However, seniors, after having made payments into their HSAs for years, are rendered helpless when they need to use the HSA funds to afford qualified homecare services under the law as it is now.
With this bill, seniors can finally make use of their tax-free savings to afford caregivers and caregiving facilities in their own homes. No need to stress a pension or retirement fund to the breaking point or burden family and friends with these expenses.
Family members won’t have to struggle to afford homecare and make ends meet for their own families as well. Homecare services were always an expense that was taken care off out of pocket. Now, with this bill, family members can relax securely in the knowledge that their older relatives will be afforded the best care possible.
The bill also makes it possible for patients to remain in familiar environments as they receive care. An AARP survey from 2014 has shown that approximately 85% of patients of the age 65 years or older prefer to live in the same home and neighborhood as they grow older. That figure is expected to move even higher as the baby boomer generation will be 65 and above by the year 2030.
The H.R 6813 has received support from groups like the Homecare Association of America, Home Instead, Hospice, Leading Age, and the Alzheimer’s Foundation.
Conclusion
HR 6813 promises to bring reform to an area of health care and housing that sorely needs it. With support from both parties, the bill is sure to see a lot of success in the coming years, and with the support it’s receiving from both the houses of representatives, this will be of help to those who can’t afford homecare.
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