No one knows how well the new health savings accounts will really end up doing, but so far they seem to be popular with baby boomers.
Boomers opened about 188,000 HSAs during the first three quarters of 2004, and boomers have accounted for 43% of all HSA sales, according to results of a carrier survey by Americas Health Insurance Plans, Washington.
Boomers are an even bigger presence, percentage-wise, in the HSA market than they are in the general health coverage market.
In 2003, roughly one-third of the 198 million U.S. residents who had private health coverage were boomers, according to the Census Bureau.
The survey results could boost morale among advisors who have been recommending that healthy, affluent boomers cut health coverage costs by combining dedicated health accounts with high-deductible health coverage.
The HSA program gives taxpayers who buy qualified high-deductible health plans a chance to deduct contributions to health savings accounts and avoid paying taxes on distributions spent on health care.
President Bush brought the HSA program to life in December 2003, when he signed a major Medicare reform bill that included a brief HSA provision.
The Internal Revenue Service and the U.S. Department of Labor have been rushing ever since to issue the regulations and release the guidance notices that taxpayers need to take advantage of the HSA program. The IRS issued a key batch of guidance in August 2004. Earlier this year, it explained the rules governing partnerships that contribute to HSAs.
Despite lingering uncertainty about how federal agencies will interpret the HSA laws and regulations, HSAs already have outsold the old, tightly limited Medical Savings Accounts, which appeared in 1996, AHIP reports.