FRAMINGHAM, MA – There’s no shortage of companies hoping to participate in the health savings account boom.
Data from a report on the accounts suggest that some 1,200 financial institutions were offering HSAs by the start of 2007, with an equal number of organizations expected to start offering them this year. There’s been rapid growth in the number of individuals with the accounts – an estimated 3 million people now use HSAs, according to recent data from Financial Insights, an IDC company.
The Framingham, Mass.-based research firm terms 2007 “an introduction year” for advances in technology and adjudication, and it expects an uptick in consolidation and collaboration in the coming years.
The tax-advantaged, high-deductible plans got a boost from more lenient provisions passed by Congress in December, and that will increase the likelihood that more consumers will fund the accounts. Accounts had been growing at an annual rate of 17.7 percent, but that will rise, predicts Dana Gould, senior research analyst for Financial Insights.
About 25 percent to 30 percent of existing HSAs are tied to debit card accounts, intended to facilitate deductions from HSAs and speed payments to providers, Gould said.
“The biggest hurdle will be to be able to tie these accounts into adjudication so the provider knows how much the patient has to pay,” he said.
Efforts to speed adjudication will be helped by a spate of recent partnerships and initiatives, and Gould expects the nation’s Blues plans to grow as players in the HSA market.
Earlier this year, the national Blue Cross and Blue Shield Association was given federal approval to start a bank that could provide healthcare-related banking services in all 50 states. Blues plans in four states are already working with the Utah-based bank, and two more are in the pipeline, Gould said. The Blues, which cover an estimated 100 million lives nationwide, want to roll out the bank to 12 to 15 plans this year and to plans in all 33 states in which it operates by mid-2008.
Gould said one of the biggest challenges remaining is creating a common set of standards and rules.
“Each health insurance carrier has its own set of rules” for how providers can receive funds from an HSA, he said. “In addition, there is no common settlement network, with some payments being made electronically and others paid with cash, check or credit or debit cards.”
The current system requires providers to make an “educated guess” about what a patient owes, and that requires a final settlement with patients. That will stall consumer confidence, Gould said, because many people are used to waiting for an explanation of benefits to determine what they owe.