At Least $1.5 Billion Held in Health Savings Accounts, Inside Consumer-Directed Care ReportsWashington, DC, August 28, 2006 — Financial firms that administer Health Savings Accounts (HSAs) say they have opened more than 1.17 million accounts and manage about $1.5 billion in assets — up more than 50% since the beginning of the year, according to data gathered by Inside Consumer-Directed Care (ICDC) newsletter and reported in its Aug. 25 issue. The estimates are based on financial data provided to ICDC by more than 60 financial firms, including JPMorgan Chase, Wells Fargo, U.S. Bank and The Principal Financial Group. A provision in the Medicare Prescription Drug, Improvement and Modernization Act of 2003 — signed by President Bush in December 2003 — gave birth to HSAs on Jan. 1, 2004. The accounts are similar to 401(k) retirement plans in their portability, and can be opened by virtually anyone who has a high-deductible health plan (at least $1,050 annually for single coverage and $2,100 for couples and families in 2006). Collectively, HSA administrators and custodians say they are opening about 50,000 new accounts each month. The average HSA balance grew from $1,181 in January to $1,260 now, the ICDC data show. The higher average balance illustrates that account holders are more likely to use HSAs as savings vehicles than as spending accounts, administrators say. “Over the past four years, just about every major health insurer has launched some type of account-based consumer-directed health coverage. Over the next couple of years, we'll see every major financial firm add HSAs to their product portfolios,” says ICDC Managing Editor Steve Davis. "With $1.5 billion in assets already — and 54% growth in just six months — there's certainly a lot of money up for grabs." Fidelity Investments, Bank of America and LaSalle Bank are among some of the financial powerhouses that will make HSAs available this fall. Detailed financial information from 33 HSA administrators can be found at http://www.AISHealth.com/ConsumerDirected/CDdata/HSAmidyear.html. Inside Consumer-Directed Care is a biweekly subscription newsletter published by Atlantic Information Services, Inc. (AIS) in Washington, D.C. AIS is a publishing and information company that has been serving the health care industry for 20 years. AIS products include print and electronic newsletters, looseleafs, books, audioconferences, seminars, strategic reports and databases. Visit http://www.AISHealth.com. Atlantic Information
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