Tuesday, March 07, 2006
PR Newswire - Mar. 3: Washington - In just two years, Americans have banked nearly $1 billion in tax-advantaged health savings accounts (HSAs), according to data gathered by Inside Consumer-Directed Care (ICDC) newsletter and reported in its Feb. 24 issue.The estimates are based on financial data provided by more than 60 financial firms including JPMorgan Chase, Wells Fargo and The Principal Financial Group.A provision in the Medicare Prescription Drug, Improvement and Modernization Act of 2003 signed by President Bush in December 2003 gave birth to HSAs. The accounts are similar to 401(k) retirement plans in their portability, and can be opened by virtually anyone who has a high-deductible health plan (at least $1,050 annually for single coverage and $2,100 for couples and families).HSA administrators and custodians have collectively opened more than 820,000 accounts and say they are adding about 60,000 new accounts each month, ICDC found. The average balance is $1,181. ACS/Mellon HSA Solution, a division of Mellon Financial Corp., says the number of accounts it administers quadrupled over the past year from 20,000 to about 80,000. "Now that HSA assets are pushing $1 billion, we're going to see competition really heat up as more national firms, small community banks and local credit unions enter this space," says ICDC Managing Editor Steve Davis. "We could even see some large health insurers launch their own financial firms, or acquire existing ones, to capture a bigger slice of this emerging market. Last December, the BlueCross BlueShield Association said it would open its own Blue Healthcare Bank in early 2007."ICDC estimates that at least 300 firms are qualified to serve as an HSA administrator or custodian. That number is expected to grow to at least 400 by the end of 2006. UnitedHealth Group, the nation's second-largest health insurer, says about 60% of members who have HSA-qualified insurance coverage have opened an account. Exante Bank, a financial firm owned by United, has opened 115,000 HSAs, which hold an estimated $75 million in assets.
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