Health savings accounts make impressive strides

Early response suggests the products are popular in the individual market.

By Joel B. Finkelstein, AMNews staff. Jan. 31, 2005.

Washington -- Americans are gobbling up health savings accounts, according to a preliminary industry survey, which suggests that the products could quickly have a significant impact on the health care market.

Recent survey results from America's Health Insurance Plans showed that from the point that HSAs became legal in January 2004 through September 2004, nearly 440,000 people enrolled in them. Most of the products were bought in the individual insurance market.

Health plans already have sold 10 times as many HSAs as they did medical savings accounts in the first year that MSAs became available.

"This is an emerging market, and it is off to a fast start," said AHIP President Karen Ignagni.

The survey polled the 29 health insurers who were selling HSAs before September 2004. Since then, the number of plans offering the tax advantaged products has grown to 75, and AHIP officials project that the number of people with these accounts likely numbers well over half a million.

"I would say that it is pretty terrific," said American Medical Association Trustee Joseph Heyman, MD. The AMA supports market reforms that make more health insurance options available to patients.

Combined with a proposed refundable tax credit for the purchase of the high-deductible health plans that accompany the accounts, the products would offer more uninsured people a good option for not only buying health coverage but also saving toward future health care costs, he said.