Bush Buys Into Tax-Free Health Savings Account

As president, he has championed such accounts as a way to make health insurance more affordable, and Congress created them last year in the same legislation that provided prescription drug coverage to some seniors.

The accounts allow workers to save money tax-free to spend on medical expenses. To qualify, workers or their employers must buy low-cost, high-deductible health insurance, intended to cover catastrophic medical expenses.

The White House indicated Thursday that Bush had set up the account for practical as well as political reasons.

"He currently gets the best healthcare in the world, but when his term ends, he will return to the private sector," said Deputy Press Secretary Trent Duffy, adding that Bush also opened the account to set an example.

"He felt that this was the best move for his current and future healthcare needs," Duffy said.

All commanders in chief receive free healthcare from the military -- for example, Bush had his annual physical last weekend at the National Naval Medical Center in Bethesda, Md. -- but their family members do not. Duffy said the president has had a private insurance plan for his family, like those available to the families of all federal employees, the entire time he has been in the White House.

That plan would cover Laura Bush and, like most private plans these days, it requires deductibles and co-pays. Citing privacy reasons, Duffy declined to identify the specific plan that the Bushes chose.

It was the president who disclosed that he had set up the health savings account. He mentioned it during closing remarks at a two-day White House conference on the economy that was designed to highlight his second-term initiatives for Social Security, tax simplification and health insurance access.

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Some health experts, however, disagree, saying the jury on such policies is still out -- and warned that a proliferation of health savings accounts could leave the ill facing ever-rising insurance premiums.

To qualify for a health savings account, individuals must be covered by a catastrophic policy with an annual deductible of at least $1,000 for individuals or $2,000 for families. Contributions to such accounts are tax-deductible, and the accounts are portable -- that is, not connected to a place of employment. Individuals may contribute as much as $2,600 per year and families $5,150 per year.