Lots going on in the Consumer-Driven space these days.
AHIP released its latest version of the annual HSA enrollment census. The results are impressive, though still understated since they only received responses from 71% of the companies. It finds enrollment growth of about 15% every year, now reaching 17.4 million. Perhaps the most interesting aspect is the state-by-state breakdown of market penetration. The old Red State/Blue State divide does not hold up when it comes to market behavior. Some of the states with low enrollment include Mississippi, Alabama, and South Carolina, while some of the highest enrollments are found in Minnesota, Illinois, and Maine.
AHIP also released, along with the American Bankers’ Association, a report on HSA account activity. One notable tidbit from this report is the size of the contributions, both personal and from employers. The average personal contribution in 2012 was $2,337, and the average employer contribution was $1,142. Also interesting is that only 19% of all the accounts had $0 balances at the end of the year, indicating that most people are retaining funds in their accounts at least for future use, if not for long-term savings.
Dr. Ben Carson has become a passionate advocate for HSAs, seeing them as a viable alternative to much of Obamacare. An op-ed he wrote has been widely circulated.
The Institute for Health Care Consumerism (IHCC) has published a series of articles on consumer driven health care alternatives. One is by the president of the American Association of Preferred Provider Organizations (AAPPO), Karen Greenrose. Her organization commissioned a Mercer survey of employer health plans and found that 45 million people were enrolled in Consumer Driven Plans in 2013, up 15% from 39 million in 2012.
IHCC published another article calling the switch to Defined contribution “inevitable.” Frank Mangert, Partner and Director of Private Exchange Technology, ebenefit Marketplace,writes –
The health care industry has been through the biggest change in history, with an impact some say is even greater than ERISA, Medicare and Medicaid. The current trends in the business and regulatory environment are leading to more creative ways to continue offering employee benefits. One of those methods has taken the industry by storm with the reinvention of the defined contribution plan.
And Christine Riedl with Aetna writes about the latest study of Aetna’s HealthFund experience. She reports that employers who have done total replacement have saved an average of $208 per member per year.
National Public Radio reports on states using HSAs in their Medicaid programs. Michelle Andrews looks particularly at what Indiana, Michigan, and Arkansas are doing.
Not everything is milk and honey in HSA Land. InsuranceNewsNet published an article by K.C. Mehaffey, who switched to an HSA and got hit with a bunch of expenses before she had a chance to build-up any funds in her account. She writes –
So here’s my real issue with Health Savings Account: The extra time I now have to spend tracking all my medical bills, figuring out how much to take out of my pay so there will be enough in my health savings account to cover everything, and working through a very unclear website to get reimbursed. It all feels like just another hoop to make it more difficult. I have to wonder, what if I were truly sick, and didn’t have the time or energy to do all this?
And BenefitsPro magazine reports that too many HSA account holders don’t really understand their HSAs. It urges employers to do a lot more employee education about how the plans work, and not just at open enrollment time.
Finally, Reno County, Nevada expects to save $327,000 in insurance costs next year, the third year in a row its costs have actually gone down as a result of switching to HSA coverage combined with a wellness program.