The success of account-based health plans might lie in the cards. Plastic “stored value” cards.
“The card market is doing phenomenally this year,” says Victoria Nipple, executive vice president of Med-i-Bank Inc., Waltham, Mass.
Med-i-Bank, which prefers to go by the name “mbi,” and its competitors help employees use the Visa and MasterCard payment networks to draw on account funds.
If Joe Foreman has a card linked to his flexible spending account, he can go to the pharmacy and use the FSA card to pay for a bottle of over-the-counter allergy pills. The clerk treats the FSA card as if it were any other debit card.
Depending on how the FSA card is set up, Joe might have to submit a receipt to his employers benefits administrator to substantiate that he used the card to pay for eligible drugs, rather than potato chips. But he does not have to worry about filing paper claim forms and waiting weeks for plan administrators to reimburse him.
MasterCard International Inc., Purchase, N.Y., the consortium that manages the MasterCard payment system, now has about 2 million health account cards out in the field, up from none in 1999, according to Ted Dargan, a vice president in MasterCards emerging markets unit.
The number of health cards probably will grow at least 10% to 20% per year for several years, Dargan said.
Med-i-Bank has 750,000 cards in the hands of U.S. consumers, up from 252,000 a year ago, Nipple says.
She would not say how exactly many of mbis health account cards draw on accounts other than FSAs. But the number of mbi cards linked to HRAs and similar accounts probably doubled in 2003 and might have tripled, Nipple says.
Evolution Benefits L.L.C., Avon, Conn., estimates it has issued 600,000 cards, up from 2,500 just 2 years ago.