This is what Democrats mean when they whine about people “paying their fair share.”

For years, Americans have been using tax-free dollars from health savings accounts to cover a wide variety of health and wellness items, including eyeglasses, tampons, massage devices, acupuncture and even fitness equipment deemed medically necessary by a doctor.

 

But now the IRS says some companies are misleading consumers about what is and is not eligible under the rules of these Health Savings Accounts (HSAs) and Flexible Savings Accounts (FSAs), which allow consumers to use pretax dollars for various health needs.

 

[…]

 

The agency says that unless consumers meet strict criteria, they can’t use funds from their HSA and FSA accounts to pay for things that promote their “general health and wellness.”

 

Calley Means, a co-founder of Truemed, a company that helps people obtain letters of medical necessity to purchase items with HSA funds, said that the IRS is on shaky legal ground and overstepping into the relationship between patients and their doctors.

 

He said that by challenging the legitimacy of some doctors’ notes and warning that HSA funds could only “rarely” be used for things such as food and exercise, the agency is setting a higher bar for people to get “medically tailored exercise and food plans than antidepressants and Ozempic.”

While the Truemed person has an obvious bias, he’s not wrong. The entire purpose of HSAs is that people can set aside some money without paying income taxes on it for the purpose of paying for medical expenses that would otherwise be tax deductible. For years, the IRS has been pretty liberal about what counts as a qualified expense or not.

This new regime is seeking to crack down on the incentive because… they can. The perverse result is that the system incentivizes people to buy drugs and equipment instead of using the money to make better, but more expensive, lifestyle choices. Is our government, once again, building policies around funneling money into the hands of Big Pharma and Big MedTech at the expense of taxpayers?

Yup.