Although a huge number of health savings accounts and health reimbursement accounts have been created that hold a record amount of assets, a study indicates that on an individual consumer level, high balances are not being maintained in these accounts. And there is little if any evidence that high deductible health plans are leading health consumers to make smarter healthcare choices.
According to research by the Washington, D.C.-based Employee Benefit Research Institute, from 2006 to 2010 the number of HSA and HRA accounts increased by nearly fivefold, from 1.2 million accounts to 5.7 million accounts. A record amount of total assets, $7.7 billion, was stashed in those HSAs and HRAs in 2010. Just four years ago account assets totaled just $834.5 million.
Meanwhile, average account balances are a mixed bag. From 2006 to 2007 they almost doubled, increasing from $696 to $1,320 but since then the increases have been more modest. In 2010 the average account balance dipped below 2008 levels to $1,355.
As for cost-comparison shopping, although it was widely expected that HDHPs would lead consumers to shop more carefully, EBRI reports that there is almost no relationship between HSA/HRA account balances or rollover amounts and price checking for healthcare services.
Cost-conscious behaviors such as checking if the health plan covers care, price comparing before a service is rendered, discussing lower-cost treatment options, or even something as simple as asking a pharmacist for the generic drug instead of the brand name one have not produced the expected uptick in account balances.
The leveling of account balances and the absence of cost conscious behaviors may add up to a big headache for health plans.
“They (health plans) should be concerned,” said Paul Fronstin, director of EBRI’s Health Research and Education Program and author of the report. “Are their members building up account balances or not? Are they covering their deductibles and out-of-pocket expenses? If not, what does that mean for the long term?”
This could be a big worry in treating people with costly chronic diseases. If those members do not maintain adequate account balances to cover their deductibles and out of pocket treatments then their health could suffer over time. (ERBI research indicates that account balances for people with chronic diseases tends to be lower than of those without such health problems.)
Fronstin says more research is needed to identify what may be affecting balances. He is quick to point out that the mechanics of HSAs make it impossible for health plans to monitor account balances. So studies like this one from the ERBI offer important insights.
Plus, even with rollovers, according to the research, it takes around three or four years for account balances to exceed $2,000. Also, HSAs and HRAs are very new and consumers may still be figuring out how to use them.
And the recent economic downturn could be playing a role in the decline of account balances.
Health plans can take comfort in at least two report findings: people who used on-line cost tracking tools supplied by their health plans maintained slightly higher account balances in 2010 than those who did not and account holders who checked the quality rating of a physician or hospital also enjoyed higher balances. That could indicate that consumers are more willing to take cost into consideration when a large amount of money is at stake.