Who (Exactly) Invests in Health Savings Accounts?

Apparently, health savings account holders are wicked smart.

Specifically, they’re more fluent in health and financial concepts than their peers, according to Alegeus, a Massachusetts-based consumer-directed health care provider.

HSA participants are 38 percent more confident they understand their health insurance coverage and 54 percent more confident in forecasting out-of-pocket healthcare costs.

They’re also more focused on cost and value than their peers. HSA participants are 23 percent more likely to make cost/value-based decisions than the general population.

Additionally, HSA participants are:

• Savvier spenders than their peers. HSA participants do more pre-purchase diligence; they are 46 percent more likely to research and compare costs and 37 percent more likely to seek out alternatives.
• More disciplined about saving than their peers. HSA participants are 68 percent more likely to have a savings goal and 80 percent more likely to be saving aggressively for future health care savings.

However, despite these positive characteristics, Alegeus found most HSA participants still don’t get the full value from their accounts.

Only 11 percent capitalize on the full tax benefit by contributing up to the maximum amount allowed by the IRS, and only 13 percent have invested their HSA savings for growth.

Given the magnitude of health care costs consumers will face this year and into retirement, most HSA participants still underfund their accounts.

“As consumer financial responsibilities for healthcare continue to grow, HSAs are the foundation for Americans to get better value for their health care dollars,” said Steven Auerbach, Alegeus CEO. “We are pleased to see HSA participants exhibit savvier spending and saving behavior. As an industry, we must continue to emphasize the importance of saving for the future and empower HSA participants to unlock the full tax advantages these accounts offer.”

The premise of health care “consumerism” is that, if given more financial responsibility for healthcare and empowered to make more informed decisions, consumers will make better choices that lead to improved health outcomes and decreased overall healthcare costs.

“Consumer-directed health plans (CDHPs) and HSAs are a centerpiece of healthcare consumerism strategies, and the good news is that they seem to deliver on their promise,” the company concludes.