HEALTH PLANS/POLICY: HSAs Triple in 10 Months, or is AHIP just blowing more smoke?

Anyone who reads THCB knows that I’ve never exactly been impressed by the scholarly worthiness of AHIP’s research, or the veracity of its leader Karen Ignani.

So I remain just the teeny-ist bit suspicious about their take on the study that they released this morning.  Their headline is “HSAs Triple in 10 Months

Over 3 Million Enrolled in High-Deductible/HSA PlansWASHINGTON — At least three million consumers currently receive health coverage through high-deductible health insurance plans offered in conjunction with health saving accounts (HSAs), according to preliminary results of a new study by America’s Health Insurance Plans (AHIP).According to the study, enrollment in the new insurance policies eligible for HSAs has roughly tripled since last March when a similar AHIP survey found that 1,031,000 people were covered by HSA-compatible insurance policies.“HSAs are a remarkable success story and they are proving to be especially attractive to many who might not otherwise be able to afford coverage,” said AHIP president and CEO Karen Ignagni. “Consumers and employers have quickly embraced HSAs as a valued option in the suite of products offered by health insurance plans.”

What’s wrong with this picture? Well first there is the recent snippet that half the 650,000 people who’ve got HSAs at America’s second biggest insurer haven’t put any money in them yet (and as far as I can tell unlike IRAs you have to do that by the end of the calendar year to get the tax credit, you can’t wait til April). So you can argue that if AHIP says there are really 3 million Americans with HSAs, there are only 1.5m with HSAs which have any money in them.

But more importantly, if you read the release closely, they are talking about a tripling in the number of insurance policies that are HSA-eligible.  In other words a high-deductible insurance policy. Now when you go to buy insurance, there have been slight changes in the high-deductible products offered making them HSA-compatible, but they are still basically the same old major-medical plans, with deductibles of $1500–3000 and max out of pocket costs of $2500 to $7500, that have been around for years.

I’ve had one of these types of plans off and on since 1998 when I left cushy full time employment at IFTF. More to the point, there is roughly 7% of the under 65 population buying in the individual health insurance market—some 15 million people. I don’t have the data and I’ve asked AHIP to call me about it, but I have a very very strong hunch that the vast majority of those people were already been buying high-deductible plans, just like me.

So it stands to reason that as the HSA came online, a huge chunk of those buying HSA-compatible high deductible health plans have simply been switching from other high-deductible health plans which were not HSA compatible because the category didn’t exist. (You can in fact still buy high-deductible plans that are non-HSA compatible if their benefits don’t mesh with what the legislation says qualifies).

I will await more information from AHIP about their study, but calling that a tripling of the market is misleading at best.

And the other thing one should consider is why, given that the HSA is such a good tax deal for the self-employed who make up the bulk of the individual insurance market, and it’s been sold so aggressively for the last 18 months, have these plans being growing so slowly?

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