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AIS's Health Business Daily
Featured Story Sept. 29, 2009
Health Savings Account Balances Kept Growing in 1st Quarter of 2009 Reprinted from INSIDE CONSUMER-DIRECTED CARE, a newsletter with timely news and insightful analysis of benefit design, contracts, market strategies and financial results. By Angela Maas, Managing Editor, Even in the midst of an economic downturn, Americans’ average health savings account (HSA) balances continue to grow from quarter to quarter, according to Canopy Financial’s HSA Market Report Q1 – 2009.
A vendor of consumer-directed health plan (CDHP) financial technology and electronic payment systems for banks and managed care companies, Canopy found that the average individual HSA account holder for the first quarter of 2009 was 42 years old and contributed $116 monthly, up slightly from an average monthly contribution of $111 for the fourth quarter of 2008. For that same time period, the average monthly employer contribution increased from $69 to $113 for individual HSA account holders. The average family HSA account holder for the first quarter of this year was 45 years old and contributed an average of $239 monthly, up from an average monthly contribution of $206 for the previous quarter. The average monthly employer contribution rose more significantly, to $266 for first-quarter 2009 from $133 in the previous quarter. The average ages remained the same for the groups from quarter to quarter.
“Consumers enrolled in CDH plans demographically are very similar to consumers of traditional health care,” notes Canopy CEO Vik Kashyap. He also points out “the fact that consumers are clearly using these accounts for saving towards long-term care needs and even retirement.”
First-quarter 2009 average individual HSA balances totaled $960, up from $928 in the fourth quarter of 2008 and from $697 for first-quarter 2008, according to Canopy. Average HSA balances for families also rose, increasing to $1,720 in the first quarter of 2009 from $1,600 in the last quarter of 2008 and from $1,419 in first-quarter 2008.
This trend of increasing contributions, says Kashyap, is noteworthy. “The most significant thing we have noticed is that even in a recession economy, both employers and consumers continue to make contributions to and invest in CDH accounts, which supports the contention that CDH products have become a key/integral component of employer-sponsored health care, and that contributions in many ways mimic those made to 401(k)s in which people invest a little bit each month into these accounts in an effort to accumulate long-term wealth/funds for long-term medical needs,” he tells ICDC.
The average balance of health investment accounts (HIAs) was a mixed bag. Average HIA balances for families increased 5% from $10,178 in fourth-quarter 2008 to $10,681 in first-quarter 2009. But average HIA balances for individuals dropped from the last quarter of 2008 to the first quarter of this year, according to the data. Canopy reports an average individual HIA balance for first-quarter 2009 of $8,002, a 2% decrease from $8,148 for the last quarter of 2008.
But the important take-away from this set of data, says Kashyap, is “the average dollar amounts invested in health investment accounts. If you look at the report, I think these numbers would be surprising to most in both health care and financial services for how high these account balances on average are.”
According to Canopy, the average monthly HSA spend for individuals in first-quarter 2009 was $81, down slightly from $83.54 in the previous quarter. Likewise, the average monthly HSA spend for families was $103 most recently, down from $108.19. Spending on hospital services continued to make up a large amount of the spend for both individual and family HSAs over both quarters. Other categories of reported spend include dental services, vision and lab/diagnostic tests.
“The most important take-away for employers is the dollar values held in both HSAs and HIAs, and the fact that their employees are using these accounts not only as savings vehicles for long-term medical expenses, but ultimately towards retirement,” maintains Kashyap. “Additionally, as their employees increasingly use these accounts to manage their health care expenditures,…they are becoming much more informed/empowered consumers of health care services, which will play a key role long term in reducing overall health care costs of an organization and the costs associated with managing employer-sponsored health care.”
Demand for CDHPs Expected to Rise
Looking forward to the next few quarters and even years, Kashyap says that “we expect to see not only more employers offering CDH products to their employees, but more employers/consumers demanding CDH products as their value in terms of reducing cost of health care, and as repositories for long-term wealth accumulation being increasingly apparent and prevalent.”
The report is available at www.canopyfi.com/hsametrics.htm. |
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