Health Savings and Tax-Advantaged Accounts: How Countries Differ

Why some countries build health savings accounts and others don't

A health savings account answers one question: who pays the part of the bill that insurance or the state doesn't? Where households pay a large share directly, governments have more reason to help them save for it. Where coverage is broad and the money comes mainly from taxes or social insurance, there's less of a gap to fill.

The out-of-pocket share of health spending shows how different that gap is. In data from the World Bank published by Our World in Data (latest years 2023–2024, accessed October 2026), households paid directly for:

The US figure surprises many readers. The share is low because the US total is enormous and most of it flows through insurers and public programmes. That doesn't mean individual Americans face small bills. High-deductible plans can leave a single household with thousands of dollars to pay before coverage starts, and that is the gap US health savings accounts were designed to fill. Our piece on out-of-pocket maximums by country looks at the per-household ceiling.

The US toolkit: four different accounts

IRS Publication 969 (2025) sets out the rules. The accounts look similar but behave very differently:

HSA numbers for 2025 and 2026

According to Publication 969, to contribute to an HSA your plan must meet the high-deductible rules:

• 2025 minimum deductible: $1,650 self-only, $3,300 family. 2026: $1,700 and $3,400.
• 2025 maximum deductible plus other out-of-pocket costs: $8,300 self-only, $16,600 family. 2026: $8,500 and $17,000.
• Contribution limits: $4,300 self-only and $8,550 family for 2025, rising to $4,400 and $8,750 for 2026 (USD).
• Catch-up: an extra $1,000 a year if you're 55 or older at the end of the tax year.
• Deadline: contributions for a tax year can be made up to April 15 of the following year.

The tax treatment is what makes the HSA unusual. Your own contributions are deductible even if you don't itemise. Employer contributions are excluded from income. Growth inside the account isn't taxed while it stays there, and withdrawals for qualified medical expenses are tax-free. Withdrawals for anything else are taxable and generally face an additional 20% tax, unless you've reached 65, become disabled or died.

One rule catches people near retirement: from the first month you're enrolled in Medicare, your HSA contribution limit drops to zero. Money already in the account can still be spent.

Health FSAs, HRAs and Archer MSAs

A health FSA has a 2025 salary-reduction limit of $3,300. If the employer's plan allows it, up to $660 can carry into the next year, so FSA money still mostly has to be spent within the plan year. An HRA is funded entirely by the employer, and the employer's plan document decides what it will reimburse. Archer MSAs are an older design. For 2025 they require a plan with a deductible of $2,850–$4,300 self-only or $5,700–$8,550 family, and contributions are capped at 65% (self-only) or 75% (family) of the deductible.

Singapore's MediSave: compulsory saving instead of voluntary

Singapore takes the opposite approach. According to the Central Provident Fund Board (page updated October 2026), working members put between 8% and 10.5% of their monthly salary into MediSave. Every worker builds up a personal health account automatically, whether or not they would have chosen to.

The money can be used for:

• Hospital stays and day surgery.
• Selected outpatient care, such as chronic disease management, vaccinations, health screening and CT or MRI scans.
• Premiums for national and private insurance plans, including MediShield Life and Integrated Shield Plans.
• Rehabilitation, palliative and disability care, within set limits.

Withdrawals are capped by type of care. For example, inpatient stays at an approved community hospital are capped at SGD 250 a day, and an approved convalescent hospital at SGD 50 a day up to SGD 3,000 a year. MediSave can also be used for close family members, including a spouse, children and parents. The balance is capped at the Basic Healthcare Sum, which is adjusted each year until age 65 and then fixed.

The page we reviewed doesn't say whether MediSave can be used for treatment overseas. If that matters to you, ask the CPF Board directly before you plan around it.

Side by side: HSA vs MediSave

The comparison shows two philosophies. The HSA rewards people who choose to save and can afford to. MediSave makes saving universal but tightly controls how the money is spent.

Systems without personal accounts

In many European systems, including the UK's, most care is paid for collectively rather than drawn from personal accounts, so there's no direct equivalent of an HSA for everyday care. Private insurance and employer health benefits exist alongside public coverage, but they work as insurance, not as tax-favoured savings. If you live in one of these countries and pay privately for treatment, at home or abroad, the money usually comes from ordinary savings.

Coverage rules also matter here. Public coverage often doesn't follow you across borders, which we cover in does your coverage travel?

Before you spend account money on treatment abroad

Publication 969 defines qualified HSA expenses by reference to the tax code's definition of "medical care". Whether a particular bill from a foreign hospital counts is a question about the service itself and about what your administrator will accept. Some procedures that are popular with medical travellers may not count as medical care. A short checklist:

1. Ask your account administrator in writing whether they will reimburse, or allow a card payment for, the specific procedure at a foreign provider.
2. Get an itemised invoice that names the provider, the patient, the dates and each service, ideally with an English translation.
3. Keep proof of payment and the exchange rate used, since your account is in dollars and the invoice may be in pesos.
4. Keep records with your tax files. HSA withdrawals may need to be justified later.
5. Check FSA timing. FSA money that isn't spent within the plan year, beyond any allowed carryover, can be lost.
6. Get qualified tax advice if the amount is large or the procedure might be classed as cosmetic.

It also helps to know the full price before you decide how to pay. Our guide to which countries publish their prices explains where reliable price information exists.

Illustrative example only: a person with self-only HDHP coverage who contributes the 2026 maximum of $4,400 for three years, and spends nothing from the account, would have $13,200 in contributions plus any growth. Whether any of it can go toward a planned operation abroad depends on the questions above, not on the balance.