HSAs Could Quadruple in Next Five Years
Driven by the emerging private health exchange sector, health savings accounts could quadruple their growth over the next five years, according to a new report.
Analysis from The Institute for HealthCare Consumerism, Consumerdriven and HSA Consulting Services predicted 50 million Americans will be covered by HSA-qualified health plans by Jan. 1, 2019, and that HSA adoption will grow to 37 million — up from about 11 million today.
More than half of that growth will be thanks to the exchanges, which massively accelerate growth, researchers said.
“While health savings accounts have experienced a steady growth rate over the past decade, health exchanges, especially private exchanges, have already demonstrated a tendency to accelerate the rate of HSA adoption among health consumers — both within the employer-sponsored and individual health care markets,” the news release said.
In 2004, the NCUA board approved HSA accounts at credit unions, but the agency said HSAs deposits represent a very small percentage of share accounts and most credit unions don't have them.
"(HSAs) do not represent a material risk nor are there implications under the proposed risk-based capital rule," said NCUA Public Affairs Specialist John Fairbanks.
"If these kinds of accounts did become a material portion of the balance sheet, NCUA would expect them to have a cash flow budget that accounts for the inflow and outflow of the accounts, as we expect from all other share accounts," he said.
Fairbanks also said one possible risk to credit unions with HSAs is that administration of the accounts is governed by IRS rules.
The market increase prediction — from consultants John Young, CEO of ConsumerDriven, and Todd Berkley, president of HSA Consulting Services — comes after interviewing, and analyzing, 33 private exchange vendors.
After examining the choices consumers made in these health care marketplaces, they “found a six- to eight-fold increase in HSA adoption in private exchanges compared to the traditional approaches used today in the commercial marketplace. In exchanges utilizing a defined contribution funding strategy, the potential for HSA adoption is even higher.”
Still, they said, there is more potential than realized. They said many private exchange operators were unaware of the HSA adoption they were driving.
“Exchanges provide the best opportunity for HSA adoption — but not all exchanges are focused on providing the best HSA customer experience,” Berkley said. “In fact, many exchanges are not aware of the HSA revolution happening inside their offering. There is room for improvement here.”
HSAs have experienced swift growth, particularly over the last few years. There were 10.7 million HSAs in the United States at the end of 2013, an increase of 30% over the prior year, according to consulting firm Devenir.
Last month, Fidelity Investments reported a 48% jump in the number HSAs opened in 2013.
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