May 18, 2005--A recent study shows that employers are offering more healthcare options, and their employees are taking advantage of the opportunity.
The study, released by American Health Insurance Plans (AHIP), shows that more than a million America workers now trust their healthcare needs to a low premium, high deductible health insurance plan (HDHP) offered in conjunction with Health Savings Accounts (HSAs), which is more than double the number of the workers covered in September 2004.
"Health Savings Plans are steadily gaining momentum in the marketplace," AHIP's president and CEO, Karen Ignagni, said. "HSA-eligible policies now fill an important niche for employers and individual purchasers."
According to the study, 1,031,000 people are covered by HDHP/HSAs, compared to the 438,000 that were covered in September of 2004. Of them, more than 700,000 are either from an individual market or an employee of a company with fewer than 50 employees. However, the group that took the largest step toward HDHP/HSAs in the last six months was the large-group market, classified as companies with more than 50 employees, which went from 13,000 to 162,000 between September 2004 and March 2003.
Established in 2003 by the Medicare Modernization Act, HDHP/HSA's encourage consumers to manage their own healthcare costs and can be used to cover current as well as future healthcare expenses. All funds put into an HSA are taken from pretax income, grow tax-free, and roll over from year to year.
According to the study, the average annual deductible for a single worker in the individual group is $2,790 -- $5,230 for a family -- the most expensive group by far. In the small group market, employers with 50 or fewer employees, the average deductible was $1,850 and $4,007, and the large-group market was $1,607 and $3,000, for single and family respectively.
The study also stated that 71 health insurers are now offering these plans to large employers, up from 15 in September, and 68 insurance companies are now offering them to small employers, up from 20.
Though HSAs have draw harsh criticism recently, both the National Federation of Independent Business (NFIB) and the U.S. Small Business Administration (SBA) stand behind them as a way to pull back the reins on soaring healthcare costs.