HSA Funding: Are Health Care Consumers Leaving Money on the Table?
By Thomas Cochrane, CFA
A Vimo Research Group Report
January 4, 2007
This Vimo ReportTM will discuss funding trends that have emerged within the HSA market over the past several years. From Vimo’s perspective, HSA funding levels are a key indicator of the health of the consumer directed movement. By focusing on recent enrollment statistics, it is clear that there is a significant gap between high deductible health plan enrollment and HSA adoption. Not surprisingly, it is also evident that HSA asset levels are deficient.
Both indicators point to a troubling trend within the budding CDH industry. Inadequate HSA funding levels will be especially detrimental to the healthcare consumer if the trend continues over time.
Many employers and individual policyholders seem to view CDH as some sort of cost containment panacea.
Vimo’s view is that treating consumer directed plans solely as cost containment tools misses the point almost entirely. Americans should be focused on the fact that the triple tax advantages of HSAs make them the most powerful qualified savings vehicles available. In addition, the point of CDH is not to avoid spending money on health care, but rather to replace insurance with highly tax advantaged savings accounts that are owned and controlled by individuals.
http://www.vimo.com/reports/hsafunding.pdf
Comment:
By Don McCanne, MD
This report from the consumer-directed health industry provides us with a rare instance of when bad health is good news.
Also the report exposes HSAs for what they really are: powerful tax-advantaged savings vehicles for the wealthy.