Government
HSAs are attracting both young and old
■ Nearly half of the more than 3 million enrollees in HSA-compatible health plans are age 40 and older, according to a recent survey.
By Amy Snow Landa — Posted March 27, 2006
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Individuals who are young and healthy aren't the only people enrolling in health plans that combine high-deductible coverage with a health savings account. Older consumers are signing up, too.
Nearly half of all enrollees in HSA-compatible health plans are 40 and older, according to the results of a recent industry survey by America's Health Insurance Plans.
Those findings refute predictions by health policy experts that these plans would appeal mainly to people who are young and healthy, said AHIP President Karen Ignagni, who announced the survey results March 9.
"It suggests that the hypothesis that was bandied about two years ago, that [this product] was going to appeal only to the young and healthy people, is not borne out by the data," she said.
But Ignagni acknowledged the survey looked only at the age of enrollees and not their health status.
The health status of consumer-driven health plan enrollees compared with those in traditional plans is a matter of debate in the health policy community. The concern is that healthier individuals will opt for HSAs, and this would cause a shrinking pool of sicker individuals who stick with traditional plans.
A recent survey by the Employee Benefit Research Institute and the Commonwealth Fund found consumer-driven health plan enrollees are slightly more likely to report being in excellent or very good health and less likely to be obese or to smoke than counterparts in traditional plans. But they had a similar likelihood of having chronic conditions.
AHIP's data are "preliminary, and it doesn't by any stretch refute the concerns that [HSA plans] mostly attract the healthy and high-income," said Edwin Park, a senior health policy analyst at the Center for Budget and Policy Priorities, a liberal think tank in Washington, D.C.
Interest jumps
AHIP has periodically surveyed the HSA plan market since 2004, when the product became available. Its latest survey, conducted in January, found that more than 3 million Americans are enrolled in HSA-compatible health plans, triple the approximately 1 million enrolled just 10 months earlier.
The survey was based on responses from 96 AHIP member companies, which represent nearly all health plans that offer HSA-eligible policies.
These types of policies are high-deductible plans that qualify the enrollee to open an HSA, a tax-free account that pays out-of-pocket medical expenses. They were legalized as part of the 2003 Medicare prescription drug legislation. The group doesn't track how many of these plans are actually combined with savings accounts.
The American Medical Association, which supports innovative approaches to expanding health care coverage, backed the legislation that made HSA plans available.
Because of the high deductible, monthly premiums for HSA-qualified health plans tend to be lower than for conventional health plans. As a result, these plans appear to be attracting a number of enrollees who did not have health care coverage.
According to AHIP's survey, 31% of HSA plan enrollees in the individual market had been uninsured. In the small-group market, 33% of HSA-compatible policies were purchased by companies that had not offered coverage.
HSA plans are "serving an important need for individuals who heretofore haven't purchased coverage," Ignagni said.