NEW YORK – Slow adoption and anticipated high development costs have prompted American Express to drop out of the healthcare payment card business.
The New York-based financial services company made its decision in recent weeks, less than two years after entering the market with a big splash. The decision spells the end of the HealthPay Plus card, which linked to cardholders’ health savings accounts.
The announcement is a sobering reality check for other financial service organizations seeking to play a role in healthcare and wanting to compete for a portion of the HSA market, which is expected to grow massively over the next few years.
“We’ve decided to exit the healthcare payments card business,” said Molly Faust, spokesperson for American Express. “We’re always looking at where we should be funding and making sure we’re funding those that have marketplace appeal. The level of investment needed to get this to the next level is significant, and acceptance is moving more slowly than we anticipated.”
The HealthPay Plus card was designed to link to a consumer’s health savings account and facilitate access to funds, as well as enabling consumers to have access to a line of credit.
For participating providers who decided to accept the American Express card, its appeal of HealthPay Plus was faster adjudication of claims. Under the American Express plan, providers could place a “hold” on HSA funds to cover claims submitted to insurers for adjudication. After payer adjudication, American Express would electronically deposit funds in providers’ accounts.
After introducing HealthPay Plus in the fall of 2005, American Express signed agreements with Wellchoice, the parent company of Empire Blue Cross Blue Shield, and Cigna Corp.
Faust said American Express has notified its partners that it will support the card through the end of the year and help them through the transition.
The company did not say how many consumers had signed up for the card, and it didn’t indicate how many providers had agreed to accept American Express transactions.
HSAs are relatively new, and there’s less than $6 billion now under management. However, that amount is expected to grow to nearly $50 billion by 2010, said Dana Gould, senior research analyst for Financial Insights, an IDC company.