Health savings account numbers still low

 

By Susan Heavey, Reuters Sep 27, 2006

The number of U.S. workers with health-savings accounts grew this year but these accounts and their associated insurance plans are far from being widely embraced, researchers concluded in a study released on Tuesday.

A centerpiece of President George W. Bush's health-care agenda, the health savings accounts, or HSAs, allow consumers to set aside before-tax money to pay for health expenses.

HSAs are offered as part of some high-deductible health insurance policies and are used to cover most doctor visits and other services until the deductible amount is met.

Premiums for most high-deductible plans, sometimes called consumer-driven plans, are lower than other health insurance plans, but workers must pay thousands of dollars before coverage kicks in.
Overall, about 4 percent of workers with job-related health coverage, or 2.7 million, are enrolled in high-deductible insurance plans, a Kaiser Family Foundation poll showed -- a rate about the same as last year.

Among those workers, about 1.4 million signed up for plans eligible for the savings accounts compared with 800,000 last year, the study said.

"We don't know yet whether workers and employers ultimately will embrace consumer-driven health plans in big numbers, but it certainly hasn't been a tidal wave," said study co-author Gary Claxton, a Kaiser Family Foundation vice president.

Among U.S. employers that provide health benefits and surveyed by the nonprofit foundation, about 6 percent overall offer HSA-eligible plans while 12 percent of firms with at least 1,000 workers make them an option.

The Kaiser foundation, along with the Health Research and Educational Trust, polled more than 3,000 public and private firms with at least three employees between January and May. About 2,100 companies responded to the full survey.

Many employers are concerned about whether the high-deductible plans will save them money and whether employees will sign up for them, the researchers said.

Bush called for an expansion of HSAs during his January State of the Union address as a way to curb health care costs.

Supporters say consumers will have an incentive to spend less because they have to pay directly for health services, while critics argue that could burden patients or force them to make tough or even risky health care choices.

To include an HSA option, health insurance plans must carry at least a $1,000 deductible for an individual or $2,000 for a family. Consumers can then save pre-tax money in an interest-bearing account where, unlike flexible health spending accounts, the funds do not expire each year.

The Kaiser survey found that 19 percent of companies that provide more traditional health insurance were "somewhat likely" to move toward HSA-eligible plans, while 4 percent were "very likely." Forty-five percent were unlikely to offer them.

Instead, companies surveyed said they were more likely to try to save money by making employees pay a bigger share of their health insurance and prescription bills.

The researchers also found workers continue to pay more for health insurance at a rate outpacing inflation and wage increases. But the growth in premiums is not increasing as fast as in recent years, they added.

On average, workers paid 7.7 percent more in health care premiums in 2006 compared with a 9.2 percent increase in 2005, the survey said.