BUSINESSBanking on HSAs: A new gold rush?Financial institutions are vying for a potential $75 billion in health savings accounts deposits. Physician practices and other small businesses are expected to fuel the growth.By Bob Cook, amednews staff. Feb. 20, 2006. There's a gold rush in the financial industry. Banks, mutual funds and other money institutions are the forty-niners. Health savings accounts are their Sutter's Mill. Even though HSAs are but a speck of dust in a rushing green river that sustains the financial industry, the projected growth of tax-free accounts into a possible $75 billion in only four years -- from $1 billion today -- has many financiers believing the speck signals gold in them thar hills. If the banks, credit unions, investment firms and even health plans opening up HSA banking and investment businesses are betting correctly, HSA debit cards will soon go from an anomaly to a frequent sight in physicians' offices. On some level, bankers are in political agreement with HSA proponents. They argue that the combination of a high-deductible health plan with tax-free contributions to a savings or investment account is an effective way to give patients more choice and better management of medical expenses while also controlling health care costs. "We feel that the health care industry has got to make some changes" in its financing system, said Richard Beck, senior vice president and corporate sales manager at Star Financial Bank, a Fort Wayne, Ind.-based regional bank that entered the HSA market in January 2005. That's exactly one year after HSAs were open for business under the Medicare Prescription Drug Improvement and Modernization Act. (The AMA fought for the inclusion of HSAs in the bill, and its House of Delegates in June 2004 passed a resolution encouraging employers to offer HSAs to their employees.) [...]Full text of American Medical News content is available to AMA members and paid subscribers.
Copyright 2006 American Medical Association. All rights reserved.
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