More than 438,000 U.S. residents signed up for health savings accounts and HSA-compatible high-deductible health insurance plans by the end of September 2004.[@@]

America’s Health Insurance Plans, Washington, presented those figures and other HSA market survey results here today at a press conference.

AHIP estimates that at least 75 carriers are offering HSA-compatible health coverage, and the group has based its HSA market survey results on responses from 29 of those carriers.

“These early data demonstrate that the market is reacting very quickly to health savings accounts,” said AHIP President Karen Ignagni.

Because the federal government did not complete work on key HSA rules for employer-sponsored plans until July 2004, HSAs have been more popular with individuals than with employers.

More than 80% of the early HSA purchasers were individuals, almost half of the covered individuals were over age 40, and 30% of the individual HSA purchasers were consumers who previously were uninsured, according to the AHIP survey.

Early demand for HSAs has been much stronger than the demand for the old, tightly regulated Archer Medical Savings Accounts, which attracted only 40,000 buyers during their first year on the market, Ignagni said.

HSAs already have achieved a higher level of market penetration than the old MSAs attained, Ignagni said.

An HSA program combines a high-deductible health coverage policy with a personal health account. Employers and employees can contribute pretax dollars to HSAs to cover the cost of routine medical expenses. HSA holders can roll unused contributions over from year to year.

The HSA program has been attractive because HSA-compatible policies tend to have relatively low premiums, Ignagni said.

Congress included the law that created the HSA program in a major 2003 Medicare reform bill, and the Internal Revenue Service released several batches of HSA guidance. The latest batch of IRS HSA guidance appeared in the summer of 2003.

Because employers make the majority of their health benefit decisions in the fall, HSAs arrived on the market too late for most employers to consider using them in 2004, Ignagni said.

More employers seem to be offering HSAs this year, and many carriers entered the group HSA market after AHIP completed its market survey, Ignagni said.

There are now 58 companies offering high-deductible plans to large employers, up from 15 in September, while the number of carriers selling high-deductible plans to small employers has increased to 56, from 11, Ignagni said.