Health savings accounts look poised to play an even more prominent role as a health care option as both the House and Senate recently introduced health care reform bills that seek to double health savings account contribution limits.
The Chicago-based fund research firm Morningstar predicts in a recent research report that HSA plans “will become crucial as investors and policymakers strive to better understand the provider marketplace.”
While HSAs are increasing in popularity, investors have “few resources at their disposal to navigate the hundreds of plans available to them,” said Leo Acheson, Morningstar’s lead research analyst for health savings accounts, in a recent statement announcing release of a Morningstar study that establishes metrics investors should consider when choosing an HSA.
Citing Devenir, an HSA consultancy, Morningstar’s research found that HSAs held more than $35 billion at the end of 2016. “With increased adoption of employers showing no signs of slowing,” Devenir projects the figure to increase by more than 40% by the end of 2018.
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Devenir further projects assets under management on the investment side to grow at a faster clip, Morningstar states.
Why have employers increasingly favored high-deductible health plans, which typically feature a health savings account?
“Companies believe that greater use of HDHPs will reduce inflationary pressure on health care spending, and, in turn, lower their health insurance expenses,” the Morningstar research states.
Health care costs have significantly outpaced general inflation in recent decades, averaging 1.4% above the Consumer Price Index during the past 10 years.
According to Morningstar, the economic theory behind HDHPs is simple: “If participants in these plans have more ‘skin in the game’ vis-a-vis higher deductibles, they will seek out preventive care, price shop for lower-cost services, and forgo unnecessary discretionary care.”