One of the few things that makes you feel worse than being sick is facing a big tax bill. But some health-related tax breaks could help, both with medical treatment and your tax bill. Some are adjusted each year for inflation.
The annual change of seasons tends to also bring some medical challenges.
Autumn’s flora means new pollens to aggravate different allergies. Schools are back in session, with classroom camaraderie meaning the sharing of germs, too. And, of course, the cold and flu season is getting started.
While these medical situations generally are easily treatable, health problems can escalate quickly. Just one unexpected medical emergency can really ding a budget.
But the tax code offers some ways that can help your financial pain, if not your specific medical ailment. Several of the Internal Revenue Code’s many medical tax breaks are also adjusted each year to account for inflation. Here, in Part 4 post of the ol’ blog’s annual tax inflation series, is a look at those health care related changes for the 2026 tax year.
Flexible spending account (FSA) bumps: A medical flexible spending account, or FSA, is a great and tax-saving way to pay for health costs that aren’t covered by your company-provided insurance. How much you put into this workplace benefit also is indexed for inflation.
The base FSA amount for a health-related account was set at $2,500 when the Affordable Care Act, aka the ACA and/or Obamacare, became law back in 2010. The ACA also allows for the possibility that the FSA limit could increase depending on inflation.
For the 2026 tax year, you can put up to $3,400 in your FSA. That’s a $100 increase from this year’s $3,300 FSA contribution limit. Inflation also helps out if your company plan provides some relief from the usual FSA use-it-or-lose-it rule. Some employers allow their workers to roll over unused FSA money into the next benefits year. The IRS says that in 2026, the allowable rollover amount of $680. That’s a $20 inflation bump from 2025’s $660 FSA rollover limit.
Health Savings Account (HSA) increases: Sometimes the cost of health insurance makes you feel worse than things that drive you to the doctor. That’s why some folks opt for a high-deductible health plan, or HDHP.
The premiums for an HDHP tend to be lower. The downside, though, is the high deductible phrase in these plans’ names. You have to pay more to reach your HDHP’s deductible amount before the insurance coverage kicks in.
The tax code offers some help in dealing with an HDHP’s high out-of-pocket costs. You can open an associated health savings account, or HSA, to pay for your larger deductibles.
The tax benefits of an HSA include:
- Fully deductible contributions up to the legal limit;
- Untaxed withdrawals when used to pay qualified medical expenses, including dental and vision exams;
- Tax-free interest on the earnings as long as the money is used to pay qualified medical expenses; and
- No requirement that HSA money be used or forfeited by a certain deadline.
The good news here is that the amounts that determine plans that qualify for HDHP status are adjusted for inflation. So are the amounts you can put into your associated HSA. This IRS actually announced HSA adjustments back in May, but since this post is looking at 2026 inflation changes to medical tax provisions, I’m including the HSA information here, too.
| Maximum Contribution and Out-of-Pocket Limits Health Savings Accounts (HSAs) and High-Deductible Health Plans (HDHPs) | ||
| 2025 | 2026 | |
| HSA contribution limit | Self-only: $4,300 Family: $8,550 | Self-only: $4,400 Family: $8,750 |
| HDHP minimum deductibles | Self-only: $1,650 Family: $3,300 | Self-only: $1,700 Family: $3,400 |
| HDHP maximum out-of-pocket amounts | Self-only: $8,300 Family: $16,600 | Self-only: $8,500 Family: $17,000 |
HDHP policy holders who are 55 or older by Dec. 31 can sock away an additional $1,000 for the tax year. A with other tax code catch-up provisions, the HSA additional contribution for older account owners is a flat one grand. It is not adjusted annually for inflation.
If you’re married, have family HDHP coverage, and your spouse also will be 55 by the end of the year, he or she also can take advantage of the added $1,000 catch-up amount for his or her own separate HSA.
Medical Savings Account (MSA): Another tax-favored medical savings account is the aptly named Medical Savings Account, or MSA. This account also is known as an Archer MSA, with the name recognizing the former Texas Republican Rep. Bill Archer’s support of the plan. Whatever you call it, these accounts also are potentially affected by annual inflation changes.
The Archer MSA was created to help self-employed individuals and employees of certain small companies meet medical care costs. But since 2007, they have essentially been replaced by HSAs. The IRS continues to account for them in inflation calculations to accommodate the Archer MSAs created before the law changed. You can find details on the different accounts IRS Publication 969.
For tax year 2026, the IRS says that an MSA plan for self-only coverage must have an annual deductible that is not less than $2,900, but not be more than $4,400. That’s an increase from the $2,850 for 2025 tax year for the low end, and also a bump from the $4,300 for the 2025 tax year.
The maximum out-of-pocket expenses (other than for policy premiums) for self-only coverage in 2026 will be $5,850. This is another increase from 2025’s $5,700 cap.
For MSA participants with family coverage in 2026, the floor for the annual deductible is $5,850. That’s up from 2025’s $5,700. However, the deductible next year cannot be more than $8,750. That’s a $200 bump from the $8,550 for this year.
If you have family coverage, the out-of-pocket expense limit (again, this doesn’t cover premiums) is $10,700 in 2026, an increase from the tax year 2025 limit of $10,500.
Long-term care coverage premiums: In addition to medical insurance, many folks buy long-term care insurance to help them pay for the assistance they might need, in their own homes or in an eldercare facility, when they are older.
Premiums for a long-term care policy are deductible up to a certain amount as an itemized medical expense. The long-term care coverage amounts that can be claimed on Schedule A as part of you total medical expenses that exceed more than 7.5 percent of your adjusted gross income (AGI), are adjusted for inflation.
The maximum deduction is based on your age at the end of the taxable year. The table below shows the maximum deductible long-term policy payment amounts for the 2025 and 2026 tax years.
| Age by the end of the tax year | 2025 | 2026 |
| 40 or younger | $480 | $500 |
| 41 to 50 | $900 | $930 |
| 51 to 60 | $1,800 | $1,860 |
| 61 to 70 | $4,810 | $4,960 |
| 71 and older | $6,020 | $6,200 |
More doses of tax inflation tips: I know. After taking in all these health care inflation numbers, you might be feeling a bit queasy. But I hope this post took you less time to read than that five-year-old magazine you thumbed through during the interminable wait the last time you went to your doctor’s office.
I also hope this information makes you feel a bit better about your taxes and how you can use these medical inflation-adjusted tax breaks to reduce them.
As promised (threatened? 😉), more in the inflation adjustment series is on the way to inoculate your taxes against rising costs. The table of contents below gives you an idea of what’s to come in the 2026 version of tax-related inflation changes. It also is a good indicator of why I do it as a series.
- 2026 tax rates and income brackets
- Standard deduction amounts and itemized deduction considerations
- Credits and deductions, including adoption costs and assistance, Lifetime Learning Credit, Earned Income Tax Credit, educators’ expenses, interest on education loans and transportation fringe benefits
- Medical-related tax provisions, including contributions to a flexible spending account (FSA), health savings account (HSA), medical savings account (MSA), and eligible and eligible long-term care premiums
- Capital gains tax income brackets, estate and gift tax limits, kiddie tax, kiddie tax, and nanny tax
- Alternative Minimum Tax exemption amounts and One Big Beautiful Bill Act changes for 2026, along with the Social Security wage base increase amount and other pay-related taxes
- International worker tax issues, including foreign income and housing exclusions
- Retirement (e.g., IRA etc.) and pension plan contribution limits
- Penalties, for both individuals and tax pros, for things such as failure to file a timely 1040 or certain information returns
- Standard mileage deduction rates (This is the final component, since the IRS issues these adjustments and later in the year.)
Again, I know all y’all tax geeks want as much tax information as soon as possible. I get it. So, I really appreciate your patience when comes to my extended presentation of the 2026 tax inflation info.
