Health Savings Account Enrollment Hits 10 Million

Ten million Americans have health savings account-eligible insurance plans, an increase of 25% since last year, a new census from America’s Health Insurance Plans finds.

Health Savings Accounts began in January 2004. Since then, AHIP has conducted a periodic census of health plans participating in the HSA/high-deductible health plan market. "HSA plans continue to be an important coverage option for families and small businesses across the country," said Karen Ignagni, AHIP president and CEO, in a media release.

The census also found that:

• Between January 2009 and January 2010, the fastest growing market for HSA/HDHP products was large-group coverage, which rose by 33%, followed by small-group coverage, which grew by 22%.
• 30% of individuals covered by an HSA plan were in the small group market, 50% of individuals covered by an HSA plan were in the large-group market, and the remaining 20% were in the individual market.
• In the individual market, 2.1 million people are enrolled in HSA plans, while nearly 3 million people were enrolled in HSA/HDHP coverage in the small-group market and almost 5 million people were covered in the large-group market.

HSAs have grown steadily since first authorized in 2003. Approximately 1 million lives were covered under the plans when AHIP began surveying the market in 2005, and roughly 2 million have been added each year since.

Despite the steady growth, the makeup of the HSA/HDHP market has changed significantly since the plans were introduced. In 2005, 64% of the high-deductible plans were in the individual market, compared to only 20% in January 2010.

The group markets now account for the largest percentage of HSAs, with large groups accounting for 50% of the plans and small groups for 30%.

"What you've seen over last year is that a large percentage of growth has come from employers," says Robert Zirkelbach, spokesman for AHIP. "More employees in large and small companies are choosing to enroll in these plans. That can be a reflection of both more employers offering them and more employees showing interest."

Despite the growth, nearly 40% of people who are eligible to enroll in an HSA don't open one, according to a 2008 report from the Government Accountability Office. The report also found that HSA users tend to have much higher incomes—on average about $139,000, compared to $57,000 for other tax filers.

It is unclear if or how recently-passed healthcare reform legislation will change the patterns of consumer-directed health plan use. Although some legislators tried to include amendments that would kill or weaken HSAs, the plans made it through the reform process with only some minor changes to spending rules.

When health insurance becomes mandatory, more individuals and employers may look to HSAs to meet the new coverage requirements. In Massachusetts, where insurance is already required, HSAs/HDHPs represent 6.9% of of total private insurance plans, which is above the 4.8% average for the nation. However, Massachusetts doesn't have the highest percentage of HSA enrollees. States with the most include Vermont (13.8%), Minnesota (9.2%), Colorado (9.2%), Arkansas (8.2%), Indiana (8.1%), Ohio (8%), Louisiana and Nebraska (7.5%).

"I think it's too early to know what impact healthcare reform will have on these types of plans." Zirkelbach says. "A lot of the final requirements need to be refined through regulations that have yet to be developed, so it's hard to know what the impact will be. But clearly you've seen consistent growth in these plans and interest in them."

For more information on the report, visit http://ahip.com/.

Elyas Bakhtiari is a freelance editor for HealthLeaders Media.

John Commins is an editor with HealthLeaders Media. He can be reached at jcommins@healthleadersmedia.com.