Healthy, Wealthy May Get Most out of Health-Savings Accounts

For some, proposal would create "mother of all tax shelters."

President Bush's proposal to expand health-savings accounts, intended to help contain spiraling medical costs, may prove a tax-free boon for the nation's rich.

Both supporters and opponents of the proposal said that the enhanced HSAs offer unprecedented tax advantages and may become more attractive than 401(k)s or individual retirement accounts as a way for the richest and healthiest Americans to build savings.

The proposal would create "the mother of all tax shelters," said Paul Caron, a professor at the University of Cincinnati College of Law.

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"This is the gift that keeps on giving," said Don Alexander, a former commissioner of the Internal Revenue Service, who ran the agency under Presidents Nixon and Ford and is now a partner at Akin, Gump, Strauss, Hauer & Feld in Washington.

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