HSA Enrollment Up 35% In Last Year

The report confirms that “HSAs are not the way to meet the health care needs of most Americans,” Stark said. “Instead, they are an effective tax shelter for people whose average incomes are nearly triple that of average tax filers.”

Waxman said the findings “provide further evidence that we need to reexamine whether this is the right way to use the government’s resources to address our health care needs.”

They added that the GAO’s findings are bolstered by “HSA advocates’ extreme opposition to legislation passed earlier this month in the House, H.R. 5719, that would require HSA enrollees to substantiate that HSA withdrawals were used for allowable medical expenses.”

They charged that data from at least one company indicate that HSA funds appear to have been spent on “escort services, at casinos and bowling facilities and in other non-health related areas.”

The Congressmen noted that Flexible Spending Accounts, a different tax-preferred health account with fewer tax breaks than HSAs, require substantiation. “In addition, the federal government requires far more onerous verification standards to qualify for Medicaid and for Part D low-income subsidy,” they added.

The AHIP survey estimates of the contributions employers made to employees’ HSAs in 2007 varied. One employer survey reported average contributions for single coverage of $626 among large employers, while another employer survey reported average contributions for single coverage of $806 among small and large employers. More than a third of surveyed employers that offered HSA-eligible plans made no HSA contributions.

Other findings of the AHIP study:

–30% of individuals covered by an HSA plan were in the small group market, 45% of individuals covered by an HSA plan were in the large group market, and the remaining 25% were in the individual market.

–HSA products accounted for 31% of new coverage issued in the small-group market. Individual market consumers selected HSA products for 27% of their new purchases of health insurance.

–HSA plan enrollment as a percentage of individuals with private coverage is estimated to be highest in Minnesota (9.2%), Louisiana (9%), Washington, D.C. (8.7%), Vermont (7.5%) and Colorado (7.1%).

Trautwein said NAHU will continue to promote HSAs as a way of helping more Americans afford health insurance. “HSAs give consumers a reason to be value-conscious shoppers in the health care marketplace and when patients are paying more attention to the cost of health care and demanding value for their dollars, total health care spending will decrease.”