President Bush has included two tax measures in his fiscal 2007 budget proposal intended to encourage the development of health savings accounts (HSAs).

First, President Bush asked Congress to “end the discrimination in the Tax Code and give Americans who buy HSA policies on their own the same tax breaks that those who get their health insurance from their employers receive.”

Second, President Bush asked Congress to eliminate the taxes on out-of-pocket spending through HSAs. Currently, the Tax Code limits the total tax free HSA contribution that can be made.