This January, the number of people enrolled in health savings accounts coupled with high-deductible health plans (HSA/HDHPs) attained new heights, increasing 25 percent over the course of a year to exceed 10 million, according to an annual census conducted by the Washington, D.C.-based trade group America's Health Insurance Plans (AHIP). However, the rate of enrollment growth actually cooled slightly: HSA/HDHPs saw 31 percent growth from January 2008 to January 2009, when enrollment was 6.1 million and 8 million, respectively.
From January 2009 to January 2010, large-group coverage was the fastest-growing HSA/HDHP market, increasing by 33 percent to almost 5 million (half of the overall HSA/HDHP enrollment). Small-group coverage came in second, rising 22 percent to nearly 3 million. Overall group-market enrollment for HAS/HDHPs hit 8 million in January 2010 vs. 6.2 million in January 2009.
Individual-market enrollment increased 12 percent from 1.8 million in January 2009 to almost 2.1 million in January 2010 (one-fifth of overall enrollment). Fifty-two percent of all individual-market enrollees were age 40 or older, but of those, only 7 percent were 60 or older.
California topped all states for HSA/HDHP enrollment, with more than 1 million people. Other high-enrollment states were Ohio (651,000), Florida (639,000), Texas (637,000), Illinois (575,000) and Minnesota (361,000).
HSA/HDHPs comprised 11 percent of all new health insurance purchases in January 2010, and preferred provider organization (PPO) products accounted for 88 percent of all HSA/HDHPs.
HSAs became available in January 2004 after being authorized by the Medicare Prescription Drug Improvement and Modernization Act of 2003. Growth has been strong, but there is still a lot of room in the market. For example, while California leads the nation with more than 1 million HSA/HDHP members, the state has about 37 million residents, points out the San Francisco Business Times. Further, HSA/HDHP enrollment is still quite low in comparison to traditional insurance. For example, Kaiser Permanente has 6 million members in California.
Like most health insurance products, no one is absolutely sure how HSAs will fare under health reform. But according to a Towers Watson analysis, if spiraling health costs are left unchecked more than 60 percent of large employers might have to pay a 40 percent nondeductible tax (known as the Cadillac plan excise tax) as of 2018, reports Dow Jones Newswires in the Wall Street Journal. That could have several chilling effects on benefits, including potentially reducing HSA contributions, says Steve Wojcik, vice president of public policy at the National Business Group on Health.
To learn more:
- review the AHIP census report
- take a look at the AHIP census report slides
- read this San Francisco Business Times article
- read the Dow Jones Newswires report in the Wall Street Journal