Dear Representative Huizenga,
On behalf of the members of National Taxpayers Union (NTU), I write in support of H.R. 975, your “Health Freedom for Seniors Act.” This legislation would allow taxpayers to make a tax-free rollover from their Individual Retirement Account (IRA) or 401(k) plan to a Health Savings Account (HSA). In doing so, the bill would provide an added dose of flexibility for seniors to address their long-term needs and empower more consumers to take control of their health care.
Under current law, most individuals who reach age 70 ½ must begin making “required minimum distributions” (RMDs) from their IRA. These dictates are often not in the best interest of the retiree as they take no account of need or market conditions that may limit the purchasing power of assets that have been accumulated from years of careful planning. Congress recognized the latter problem in 2009 when it granted a moratorium on RMDs to prevent seniors from being forced to sell investments after the U.S. markets had lost more than $8 trillion in value. Although market fluctuations of that magnitude are hopefully an aberration, even small ebbs and flows in performance can have a significant impact on seniors’ nest eggs.
H.R. 975 would put seniors in better charge of the timing decisions behind any withdrawals by permitting an elective tax-free rollover into a HSA, which carries no RMD stipulation. The increased flexibility would ensure that seniors, whose lifespans continue to grow, are allowed to preserve their savings for health care as their own personal situations require. Furthermore, expanding the use of HSAs would better allow consumers to make their own health care decisions by comparison shopping based on price and quality. By permitting dollars to shift from premiums to direct payments for goods and services, HSAs have introduced free market forces that are too often absent in today’s entitlement-driven health care model.
Choice in how seniors can deploy retirement savings and spend their health care resources is the core principle at the heart of H.R. 975. NTU is pleased to endorse the “Health Freedom for Seniors Act” and urges all Representatives to cosponsor this legislation.
Sincerely,
Nan Swift
Federal Affairs Manager
