State Legislation and Actions on Health Savings Accounts (HSAs)
and Consumer-Directed Health Plans, 2004-2009

 Updated: June 1, 2009; reposted 11/5/2009

State laws and regulations passed in 2004-08 now play a role in the use of health savings accounts, through insurance regulation, measures that encourage development or offering of HSAs and/or laws that provide state tax exemptions to parallel federal tax treatment.  HSA laws and commercial marketing usually are closely tied to High-Deductible Health Plans and are referred to as "Consumer-Directed Health Plans."¹

Who is eligible for HSAs?

There are four federal requirements to be eligible for HSAs:

1. A person must be covered simultaneously by a qualified “high-deductible” health insurance policy (HDHP). 
   For 2009, participants in qualified HDHPs are required to pay the first $1,150 of their medical expenses ($2,300 for family coverage) before insurance benefits begin.  This is an increase from the 2007 and 2008 deductible of at least $1,100 for an individual or $2,200 for families; the 2006 dedictible was $1,050 individual/$2,100 family. 
   (Conventional insurance plans, whose participants cannot contribute to HSAs, typically have deductibles of about one-third these amounts.)
2. The HSA enrollee cannot be covered by any other health insurance plan, such as a spouse’s plan.
3. The HSA enrollee must be under age 65.
4. The HSA enrollee cannot be claimed as a dependent on someone else’s federal income tax return.

There are no income, employment or other age limits in the federal law. For 2009:

What is Covered or Allowable for HSA Payments?

Traditional medical costs such as diagnosis and treatment of disease are allowable, as well as routine medical visits. In addition, many expenses that may not be covered by traditional health insurance can be paid for through HSA accounts. These include prescription drugs and some non-prescription drugs, eye care, dental care, COBRA premiums, acupuncture, Braille books, midwife services, seeing-eye dogs, qualified long-term care services, and more. If an enrollee uses HSA money for non-medical expenses and is under the age of 65 or not disabled, he or she will incur a 10 percent penalty in addition to owing regular federal income tax on such amounts.
An employer may elect to contribute financially to an employee HSA as much or as little as they choose (while staying below the annual legal limit on the account of $2,850 or $5,650 for employees with family coverage).

What are "Medical Savings Accounts" (MSAs)?

MSAs are accounts established during the earlier decade, 1993-2003,  for covered individuals and their families.  They helped finance part of the cost of the deductibles, co-payments, and other medical expenses that are not covered by a person's health insurance plan.  These earlier plans generally are not preempted or eliminated by the new federal law.

Which States have had MSA laws (pre-HSA)?

In the early to mid-1990's several states, including Arizona, Colorado, Idaho, Illinois, Michigan, Mississippi, and Missouri pioneered Medical Savings Accounts state laws.  Congress responded in 1996 with a federal pilot program, contained within HIPAA.  This led to at least 15 additional states enacting their own MSA laws, for a total of 26 states with MSA laws as of December 2003.  These states are: Arizona, Arkansas, California, Colorado, Florida, Idaho, Illinois, Indiana, Louisiana, Maryland, Michigan, Mississippi, Missouri, Montana, Nevada, New Jersey, New Mexico, Ohio, Oklahoma, Oregon, Pennsylvania, Utah, Virginia, Washington, West Virginia and Wisconsin. 

What is the difference between a Medical Savings Account (MSA) and a Health Savings Account?

• Lower deductibles; for example, HSAs are combined with "high deductible insurance" with deductibles of $1,100 for individuals and $2,200 for families. The MSA accounts usually required combination with high deductible health insurance no lower than $1,700 for an individual and $3,450 for families.
• HSAs allow contributions of 100 percent of the full deductible up to a limit of $2,850 for individuals and $5,650 for family coverage. MSAs allowed for 65 percent of an individual’s health insurance deductible, and 75 percent of a family’s.
• With HSAs, unused balances roll over from year to year.  HSAs also can move with an employee from one employer to another. 
• HSAs apply to all employers. Most MSAs only apply to small employers of 50 employees or less.
• HSAs can be funded by employer and/or employee contributions. MSAs had to be only employee contribution or only employer contributions, not both. 
• HSAs apply an extra tax penalty of 10 percent for non-health distributions made before death, disability or age 65. The penalty is 15 percent for MSAs.

2005-08 Activities

Four years after the federal HSA authorization, the commercial market has become far more involved in offering and promoting HAS accounts to the general public.  Many technical issues were not resolved until the summer of 2004, when the US Treasury developed formal guidelines.   "Insurers are going crazy to get products out," according to Medscape, a professional news service, quoting Dan Perrin, Executive Director of the HSA Coalition, a Washington, DC group that has worked to promote the accounts.  In late 2004, Humana, UnitedHealth Group, and the Blue Cross network all announced new or expanded entries into the market of "consumer-driven health plans."   

"By the Numbers: 2008-09 Surveys": 
A new survey, released November 2009 provides a useful overview and detail, without advocacy or opposition.  A key synopsis from the authors at Employee Benefit Research Institute (EBRI). :

2005 Laws:  HSA-related laws were signed in at least 26 states, including Arizona, Arkansas (2), Florida (3), Georgia, Idaho, Illinois, Indiana, Iowa, Kansas (3), Kentucky, Maine, Maryland, Minnesota, Mississippi (2), Nebraska, Nevada, New Jersey, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, Texas (2), Virginia (2) and Washington. 

2006 Laws: HSA-related laws were signed in: Massachusetts, Ohio (2), Pennsylvania and Utah.

2007 Laws: HSA-related laws so far have been signed in 19 states:  Alaska, Arkansas, Arizona, Colorado, Georgia, Indiana, Kansas, Maryland, Minnesota, Missouri, Mississippi, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Texas, Utah and Washington.

2008 Laws: HSA-related laws were signed in at least seven states: Georgia, Kansas, Minnesota, New Jersey, Oregon, Pennsylvania and Rhode Island.

2009 Laws: HSA-related laws so far have been signed in two states: Utah and Virginia. 

Map of States with HSA Laws passed in 2004-2006

MAP KEY  This map includes HSA-related state laws enacted: > in 2004 (dark green) > in 2005 (bright green) > in 2006 (light green) For states with laws passed in multiple years, generally the earliest law is coded on the map.   Medical Savings Account Laws (1994-2003) are not color-coded.  Laws have varying effects CORRECTION: This map clarifies the map published in State Legislatures magazine (Page 24, May 2006) which only shows laws enacted in 2005.

MAP KEY This map includes HSA-related state laws and resolutions enacted: > in 2007 (blue)

State Laws and State Obstacles to HSAs

According to an analysis of existing laws conducted by insurers, there are three broad categories of state laws related to state tax treatment of HSAs.  An updated analysis including NCSL data shows the following:

NOTES: A) Although HSA contributions are exempt from federal taxes, as of the 2005 tax year, six states — Alabama, California, Maine, New Jersey, Pennsylvania and Wisconsin — did not exempt HSA dollars from state taxes,  [5]
B) See STATE INDIVIDUAL INCOME TAXES, 2006 ; HSA State Income Tax Chart, 1/2007 
C) NH State Income Tax is Limited to Dividends and Interest Income Only.
D) PA excludes from taxation HSA contributions by employers but not by individual employees, based on language in their 2005 law, HB 107

State Conformity: An evolving Issue

On Jan. 1, 2004, when HSA-based health plans became available, laws in 17 states included "structural impediments" that made it difficult to pair an HDHP with an HSA, says Larry Akey, a spokesperson for America's Health Insurance Plans (AHIP), the trade association for health insurers. 

As of October 2006, "Inside Consumer-Directed Care" Newsletter reported that "just four" states have structural impediments to HSA-HDHP pairing: Alabama, California, New Jersey and Wisconsin.   Three other states - Illinois, Missouri and New York - have "HMO deductible limitations and/or mandated benefit impediments to offering an HSA-based plan according to AHIP spokesperson Mohit Ghose. 

Earlier, in August 2005,  Inside Consumer-Directed Care reported that, "Insurance commissioners in Rhode Island, Pennsylvania and Florida reported that lawmakers in their states recently removed legal roadblocks that would have made it impossible, or at least difficult, to pair a health savings account (HSA) with a high-deductible health plan (HDHP). But the clock is ticking for legislators in several states that still have laws on the books that could prevent or impede the adoption of HSA-based health plans on Jan. 1, 2006, when a two-year "transition period" granted by the Treasury Dept. comes to a close."

(Note that there are differing interpretations of what change is needed.)  While some states — including Illinois, Maine and Missouri — allow insurers to pair high-deductible PPOs with HSAs, they can't couple the accounts with a high-deductible HMO. "Our HMOs cannot be used with an HSA because the deductibles are too low. By our definition, a plan that has a high deductible is not an HMO," says Sue Hofer, a spokesperson for the Illinois Division of Insurance. "We expect that employers that want to offer HSA-qualified plans will do so by offering a [high-deductible] PPO."

For a 2006 analysis of state laws, especially the impact of existing state mandate and "first-dollar coverage" requirements, see
HSA State Implementation Issues Report by CAHI, January 2006.

State Fiscal Impacts of HSA Tax Law Changes

When a state adds an HSA-specific income tax exemption the resulting tax savings for the individuals also mean loss of state revenue.  In the start-up phase of 2005-2006 it has been relatively difficult for states to know the tax impact of HSA exemptions.  However, for the NCSL study of 2005 State Tax Actions, staff author Bert Waisanen reported the following:

Medicaid: Health Opportunity Accounts (HOA)

The federal Deficit Reduction Act (DRA) enacted in February 2006,  provides states with "much of the flexibility they have been seeking over the years to make significant reforms to their Medicaid Programs."  CMS provides the following summary: "Section 6082 of the DRA allows for States to operate Medicaid demonstrations programs to test alternative systems to deliver Medicaid benefits through a Health Opportunity Account (HOA) in combination with a high deductible health plan (HDHP)."  Since HOAs were designed for Medicaid recipients, the maximum out-of-pocket costs in HOAs are relatively low: $250 for adults and $100 for children.  Once the deductible is reached, Medicaid covers the cost of health care services.  

The financial structures of these accounts have several parallels to the private market HSAs. CMS has restated that only ten states will be approved to operate HOA Medicaid State Plan Amendments for the first five years of the program. The demonstrations will provide States with the option of allowing individuals to voluntarily assume greater responsibility for their own care by enrolling in flexible consumer-based accounts. Beneficiaries are given the tools to take a greater role and responsibility in their health care." >  Full Text of federal "Health Opportunity Accounts" Section 6082, P.L. 109-171
> Health Opportunity Accounts: What Are They, and Why Should State Advocates Care? - Families USA advocacy memo, 2007 [10 pages  PDF]
> Medicaid Reform Strategies for Texas: HSAs and HOAs - Feb. 2007

South Carolina was the first state to receive a HOA demonstration grant and the only state reporting a planned HOA demonstration in the Kaiser/HMA survey released 10/07. In FY 2008, South Carolina plans to implement two one-county pilots each limited to 1000 beneficiaries: a voluntary HOA demonstration for healthy adults and children and a voluntary “Health Savings Account” plan using DRA benefit flexibility (discussed in the benefits section). Once a beneficiary’s HOA has been depleted, the member will have out-of-pocket responsibility for 10 percent of costs up to a maximum of $250 for an adult or $100 for a child.  No additional cost-sharing is applied thereafter.   Online: SC HOA Bulletin, 5/08

Medicare Offers Medical Savings Accounts 

In 2007, for the first time, "virtually every" Medicare beneficiary was able to select a Medical Savings Account" (MSA) within Medicare.  For the 2008 enrollment period (11/15/07-12/31/07) HSA supporters are spreading the word on this less-publicized option.  Greg Scandlen, head of Consumers for Health Care Choices provided a feature in "Health Care News" for January 2008, describing the somewhat difficult-to-navigate web site sponsored by CMS/HHS, that provides the details.  Note that most Medicare MSAs do not cover prescription drugs. SEE Medicare MSAs online (state level data.) 

* = State provides for carryover of 2005 bills to 2006 under some circumstances.

News, Opinions, Reports and Useful Links

• California Employer Health Benefits Survey Tracks Key Insurance Trends for 2008 - As California employee health premiums continue their upward march, the percentage of California employers offering high-deductible health plans more than doubled in the past year, jumping from 18% in 2007 to 38% in 2008, according to the latest edition of the California Employer Health Benefits Survey. A smaller proportion, one in ten firms, offered a high-deductible plan with a savings account option in 2008. 12/18/08.

• Premium Hikes May Hit Small Firms That Adopt Consumer-Directed Health Plans for the Wrong Reason. Reprinted from INSIDE CONSUMER-DIRECTED CARE, 10/23/08.

• "Consumers Know the Time Is Right for Market-Based Health Care Reform" article by Heartland Institute, 7/1/08

•   "Health Savings Accounts: Participation Increased and Was More Common among Individuals with Higher Incomes" - General Accountability Office (GAO), Released online 4/30/08. 

• "January 2008 Census shows 6.1 million people covered by HSA/high-deductible health plans" - AHIP report released April 2008

• "A Survey of Preventive Benefits in Health Savings Account (HSA) Plans, July 2007" - AHIP Center for Policy and Research, (November 2007).

• Consumerism in Health Care Survey, 2007" Enrollment in consumer-driven plans with a tax-advantaged account represented 2 percent of privately insured adults in 2007, up from 1 percent in 2006. One of 10 insured adults had high-deductible health plans without accounts.  The Employee Benefit Research Institute and The Commonwealth Fund, Released 3/18/08.

• Consumerism in Health Care Survey, 2006: Early Experience With High-Deductible and Consumer-Driven Health Plans - study by EBRI/Commonwealth, 5/07.  [48 pages PDF ]

• A Guide for State Legislators: Creating an HSA State" - "A Market-based Solution to Affordable Health Insurance and Lowering the Number of Uninsured Americans."  Published by Center for Health Transformation.  Updated 4/07. [29 pages PDF]

• “Large Health Savings Accounts: A Step toward Tax Neutrality for Health Care.” Forum for Health Economics & Policy.

• I'm Not Going to Pay a Lot for This MRI: Navigating the Brave New World of consumer-directed health care.  Article by Michael F. Cannon, Cato Institute, 06/15/07

• Consumer Directed Health Plan (CDH) Compared to Commercial Insurance Plans, 2004-2005 published by Definity Health, 4/23/07. [4 pages PDF ]

• Consumer-Driven Healthcare: Current Practices, Future Upgrades - by The Conference Board Consumer-Driven Healthcare Working Group.  Purchase required. 3/07. 

• Consumer-Directed Health Plans: Small but Growing Enrollment Fueled by Rising Cost of Health Care Coverage" published by U.S. GAO-06-514, 4/28/06. [38 pages ]

• Consumer-Driven Healthcare - Its Impact on Physicians  -Authored by FCG - Emerging Practices, October 2006 [free registration required] PDF
  It is widely known that consumer-driven healthcare (CDH) greatly impacts health plans in how they do business and serve their customers. What is less apparent is how CDH also impacts healthcare providers. Providers will need to anticipate and prepare for CDH-driven changes that will impact revenue collections and market competition. This report highlights some of the expected changes and offers recommendations regarding how providers prepare for them.

• "Looking to Friedman's Wisdom on Health Care," Small Business and Entrepreneurship Council, 2/1/07.

• "Communication Challenges Loom Large in Benefit Enrollment Process", Watson Wyatt Survey Finds.  1/31/07.

• High-Deductible Health Plans Cost More for Women, Study Finds [4/6/07] - as reported by Kaiser Network.

• Congress Passes Legislation To Expand, Encourage Use of Health Savings Accounts
  The House Ways and Means Committee on 9/27/06 voted 24-14 along party lines to approve a bill that seeks to expand enrollment in health savings accounts. The legislation increases the limit on HSA contributions, which is currently capped at the amount of the deductible, to $2,700 for individuals and $5,450 for families. The increase would take effect in the 2006 tax year. In addition, the bill would allow individuals to transfer funds from health reimbursement arrangements and flexible spending accounts to HSAs. The legislation also would allow a one-time transfer of funds from individual retirement accounts to HSAs without a tax penalty. According to estimates by the Joint Committee on Taxation, the bill would increase the number of individuals who have HSAs by 300,000 at a cost of $1 billion over 10 years. Committee Chair Bill Thomas (R-Calif.) said that the legislation has "a very great possibility of being one of the few" to pass before the midterm elections and that the Senate is "very excited" about the bills.  (Blinkhorn, CQ Today, 9/27/06).

• "Health savings accounts slow to catch on among insured" - article,  The Dallas Morning News, 10/23/06.

• Study: 'Consumer-Driven' Coverage Often Reduces Consumer Cost-Sharing - Health Affairs, July/August 2006 [9 pages ]

• "Consumer-Directed Health Plans: Small but Growing Enrollment Fueled by Rising Cost of Health Care Coverage" U.S. GAO-06-514, 4/28/06 [38 pages ].

• "Consumer-Driven Health Care Spurs Innovation in Physician Services" released by NCPA, June 12, 2006 [2 pages ]

• Avoiding necessary care: A Kaiser Family Foundation survey of individuals enrolled in Consumer-Driven Health Plans found that while greater cost-sharing made consumers more price-conscious, they couldn't differentiate between frivolous or necessary care, causing them to avoid both. Individuals in CDHPs were twice as likely to avoid care because of cost than were individuals in traditional plans.

• Health Savings Accounts: Do the Critics Have a Point?, by Michael F. Cannon, Cato Institute, 5/30/06.

• Informing the Debate about Health Savings Accounts: An Examination of Some Misunderstood Issues (Center on Budget and Policy Priorities, 6/13/06)

• Health Savings Accounts Unlikely to Significantly Reduce Health Care Spending (Center on Budget and Policy Priorities, 6/12/06)

• Health Savings Accounts: Why They Won't Cure What Ails US Health Care (Washington: Commonwealth Fund, 6/06)

• Tutorial: Consumer-Directed Health Plans (kaiserEDU.org, 6/06)

• "GAO: High-Deductible Insurance on Rise" - Associated Press (Houston Chronicle) 5/30/06

• Employer Health Benefits 2006 Annual Survey - This annual survey of employers provides a detailed look at trends in employer-sponsored health coverage, including changes in premiums, employee contributions, cost-sharing policies, and other relevant information. This year the survey also documented the prevalence of high-deductible health plans associated with a savings option. Versions: High Deductible Health Plans with Savings Options (Sec. 8, 18 pages) |
   News Release | Summary of Findings | Chart Pack | Health Affairs article: Health Benefits In 2006  PDF.
  Researchers at the Kaiser Family Foundation, The Center for Studying Health System Change and Health Research and Educational Trust designed and analyzed the survey.  Published 9/26/06. 

• "Early Experience With High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey | PDF download" This Issue Brief presents results of the first EBRI/Commonwealth Fund Consumerism in Health Care Survey, which was conducted to provide reliable national data on the growth of high deductible plans and their impact on the behavior and attitudes of health care consumers. The survey—the first national one of its kind—found lower satisfaction with consumer-driven plans. 12/7/2005.

• Health Savings Accounts fastest growing area of the healthcare market - release | survey, according to healthcare executive survey by America Re HealthCare, 4/10/06.

• Transparency in healthcare a priority  An Op-Ed in The Hill by Secretary Mike Leavitt, 5/12/06

• "Update 2006: Why Are Health Costs Rising?" A market-based perspective brief by National Center for Policy Analysis, 9/21/06. [2 pages ]

• KFF on "Consumer-Directed Health Care" - This Kaiser Family Foundation tutorial and companion issue module discuss the principles and different models of consumer-directed health care such as Health Savings Accounts (HSAs), and has links to the latest research and policy analysis.  9/06.

• HSA for America - example of a for-profit company whose goal is "We can help you find a High Deductible Health Plan insurance policy, as well as a Health Savings Account to meet your needs."  Fort Collins, CO. 2006.

• Consumer-Directed Health Plans: Implications for Health Care Quality and Cost  - CA Health Care Foundation article on report produced by RAND, June 2005.

• Consumer-Directed Health Plans: Executive Summary RAND, 6/05  [2 pages - 40K]

• Consumer-Directed Health Plans: Full Report RAND, 6/05 [37 pages -529K]

• FEATURE: HEALTH SAVINGS ACCOUNTS: THE JOB OF PATIENTS - Governing Magazine/February 2006

• "Health Care Coverage Debate" - PBS-TV: two guests offer differing opinions on how to fix America's health care system - 2/16/06

•  “Health Savings Accounts Work,” by Michael F. Cannon of Cato Institute, Philadelphia Inquirer, 2/5/06.

• [4] "Health Care at the Swipe of a Card" - article by New York Times, 7/16/05 -

  [5]  Legislators in Most States Have Cleared the Way for Health Savings Accounts - 8/19/05 issue of Inside Consumer-Directed Care. 

NOTES:
¹ - The federal legal definition of HSA and HDHP are contained in "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C. 223, as amended.

Compiled by Richard Cauchi, NCSL Health Program, Denver, with additional material from NCSL researchers Brittany Howe (2007), Shira Gitomer (2004), Madeline Kriescher (2006) in Denver and Kala Ladenheim (D.C. office).

_________________________________________________________________________

APPENDIX A

PROs AND CONs OF HSAs

"Insurers will need to change with the times and be able to provide the high-deductible health plans and HSAs defined within the new legislation," said Karin Landry, Managing Partner, Spring Consulting Group, LLC, who has more than 17 years of experience in the insurance, healthcare, risk financing and benefits industries.

Despite recent publicity about HSAs, most U.S. workers have neither heard of HSAs nor understand how they work, according to a 2005 survey by Watson Wyatt Worldwide. HSAs connect with consumer-driven health plans to offer an important alternative to employers seeking to hold the line on costs and engage the consumer in healthcare decision-making. **

HRAs: An Alternative Health Account 

HRAs are medical care reimbursement plans established by employers that can be used by employees to pay for health care. HRAs are funded solely by employers. Employers typically commit to make up to a specified amount of money available in the HRA for expenses incurred by employees or their dependents. HRAs are accounting devices, and employers are not required to expend funds until an employee incurs expenses that would be covered by the HRA. Employees may use the HRA to pay for medical expenses and premiums. Unspent funds in the HRA usually can be carried over to the next year (sometimes with a limit). Employees cannot take their HRA balances with them if they leave their job, although an employer can choose to make the remaining balance available to former employees to pay for health care.

HRAs often are offered along with a HDHP. In such cases, the employee pays for health care first out of his or her HRA and then out-of-pocket until the health plan deductible is met. Sometimes certain preventive services are paid for by the plan before the employee meets the deductible. (Source: Employer Health Benefits 2005 Annual Survey by Kaiser & HRET, 9/14/05)
 

•  Employers have been changing the structure of health benefits in order to control the cost of providing health benefits. Participation in so-called “consumer-driven” health plans, which include high-deductible health plans and a tax-preferred savings or spending account, grew to an estimated 7.5 million adults ages 21–64 with private health insurance in 2007, according to Employee Benefit Research Institute (EBRI),at the U.S. Senate Finance Committee’s Health Reform Summit.  EBRI Research on Employment-Based Health Coverage, June 16, 2008.

• The General Accountability Office (GAO), an investigative arm of Congress, found the plans do indeed attract the wealthier, those with an average income of $139,000, compared with about $57,000 among others plans, an analysis based on income tax records. The plans are typically coupled with a tax-favored savings account to help patients pay for medical bills. About 40 percent of those in the plans chose that option, GAO found.   "Health Savings Accounts: Participation Increased and Was More Common among Individuals with Higher Incomes"  GAO-08-474R, April 1, 2008.

• "More than 6.1 million people were covered by High Deductible plans by the beginning of 2008, up from about 3.2 million in 2006", according to America's Health Insurance Plans (AHIP).  States with the highest percentage of HSA/HDHP enrollees among their under 65 populations with private health insurance were Minnesota (9.2 percent), Louisiana (9.0 percent), District of Columbia (8.7 percent), Vermont (7.5 percent), Colorado (7.1 percent), Nebraska (6.4 percent), Connecticut (5.8 percent), Wisconsin (5.6 percent), Indiana (5.1 percent), and Iowa (5.0 percent).  
       For HSAs, the average length of time accounts had been open was 16 months. During the year 2007,  83 percent of the reported accounts in place had average annual balances of $2,500 or less; 7 percent had account balances over $5,000. The average balance in HSA accounts in 2007 was approximately $1,380. The average amount spent from HSA accounts in 2007 was approximately $1,080.
  > [Reuters: "Wealthier pick high-deductible health plans-US GAO" 5/1/08].

• Enrollment in consumer-driven plans with a tax-advantaged account represented 2 percent of privately insured adults in 2007, up from 1 percent in 2006. This represents 2.3 million adults ages 21-64 with private insurance. More than 30% nnrolled in Consumer-Driven Plans have household incomes over $100,000 a year.  One of 10 HDHP insured adults had high-deductible health plans without accounts.  "Consumerism in Health Care Survey, 2007" The Employee Benefit Research Institute and The Commonwealth Fund, released 3/18/08.

• About one percent of the privately insured U.S. population ages 21–64 (or 1.3 million individuals) were enrolled in a plan with either an HSA or HRA, collectively known as consumer-driven health plans (CDHPs), as of September 2006, according to the second annual Employee Benefit Research Institute (EBRI)-Commonwealth Fund Consumerism in Health Care Survey. Another 7 percent, or 8.5 million adults, had plans with deductibles high enough to qualify for health savings account, but of these only 2.6 million were offered or aware of the option to open an HSA.  . The survey showed that among individuals with a CDHP, 57 percent of respondents had an account for less than one year. Overall, 14 percent had no money in their account and another 32 percent had less than $500.  EBRI Issue Brief  http://www.ebri.org/ December 2006.

• "HSA Penetration Reaches 5% But Varies by State, ISI Study Shows."  Health Savings Accounts (HSAs) have had varying levels of adoption when taken on a state-by-state but are approaching 5% of all healthcare insurance users on a nation-wide basis, according to an analysis by Information Strategies, Inc. (ISI).  Among the states with the highest penetration, 5-7% were Wisconsin, Texas, Georgia, Florida, Illinois, Ohio, Tennessee and Kentucky. Amongst the lowest with penetration levels below 2% are New York, New Jersey, Rhode Island, Hawaii and Vermont."  [50-state map] Published by hsafinder.com, 5/07.

• The "Qualified High Deductible Health Plan (HDHP) Atlas" - provides "a snapshot of the HDHP market with independent statistics, and allows viewers to interactively navigate around the country to see currently available prices, premiums and HDHP product features." A companion Market Report with supplementary information on HDHP availability for 44 states and the District of Columbia, can be downloaded at no charge.  HDHP Atlas  | HDHP Market Report  [PDF]

• HSA/HDHP coverage in the group market rose from 397,000 in March 2005 to 1.4 million in January 2006. Nationally, three million people, just over two percent of the private health insurance market, had high deductible health plans (HDHP) "qualified" for use with HSAs, according to Larry Akey, describing a survey completed in late January for America's Health Insurance Plans (AHIP).  Enrollment in the individual market rose from 556,000 in March 2005 to 855,000 in January 2006.

• In the individual market, 31 percent of new enrollees in HSA/HDHP plans were previously uninsured. In the small-group market, 33 percent of enrollment in HSA/HDHP plans was in small companies that previously did not offer coverage.
• A separate survey by the trade publication, Inside Consumer-Directed Care, (2/28/06) reported 820,000 HSA accounts existed by January 1, 2006, containing a total of $967 million in HSA assets, an average balance of $1,181. 
• In September 2006, Blues Plans collectively claimed "nearly 1.2 million lives are covered by a high-deductible health plan (HDHP) that is compatible with HSAs.  Another 653,341 were enrolled in an HRA (health reimbursement arrangement).  United Health Group also "says its account based plans cover about 2 million lives.  [AIS Report: BC/BS Plans, 9/06]
• Harris Interactive reported that of consumers with an HDHP, only 13% have an associated financial account.
• 28 percent of employers currently offer a CDHP to their employees, which is up from 22 percent in 2005.  (Aon survey 6/06)
• Of those employers with a CDHP, 75 percent began offering the plan in 2005 or 2006, illustrating the relative newness of the concept and its growing appeal.
• The use of health reimbursement arrangements (HRA) and health savings accounts (HSA) have evolved since last year. Today, 43 percent of organizations with CDHPs offer an HRA, 48 percent offer an HSA and 10 percent offer both. This compared to last year when 65 percent offered an HRA, 15 percent offered an HSA and 15 percent offered both. (Aon survey 6/06)
• A survey released by Watson Wyatt in March 2005 showed that among large employers, 8 percent offered health savings accounts, 18 percent planned to offer them in 2006 and 47 percent were considering offering them.  The company polled 555 employers with at least 1,000 workers each. 
• High-deductible health insurance policies eligible for linking with tax-free savings accounts through a new federal program have attracted more families and low-income people than had been expected, a March 2005 study concluded.  Almost half the purchasers of policies eligible for coupling with Health Savings Accounts were families and 40 percent had incomes of $50,000 or less, according to the study, which was conducted by www.ehealthinsurance.com, an online service representing more than 140 health insurance carriers nationwide. 
• Another survey also focused on the growing employer involvements in the consumer health trend, showing "74 percent of the companies offering CDHPs started them in 2004 and 2005, with over half that group only implementing CDHPs this January" of 2005. ***
• In July 2005, the New York Times reported that some banks, including J. P. Morgan Chase, "were ready at the beginning of 2004 with health savings accounts that mimicked existing online banking programs. About 40,000 people have signed up for health savings accounts at Chase and the bank expects that number to increase tenfold over the next year, executives there said.  One major insurer, the UnitedHealth Group, has gone so far as to set up its own bank, called Exante, to offer health savings accounts, and says that 44,000 accounts have been opened there, with an average monthly deposit of $862, including money contributed by both employers and employees." [4]
• Health accounts get noticed: The tax-free accounts have attracted more low-income people than industry watchers expected.  Kansas.com, March 27, 2005.
• The Commonwealth Fund released a study on 1/27/05, that found that people with high-deductible policies were more likely to have trouble paying medical bills than those in traditional insurance plans. They were also more likely to skip care because of cost. The study did not look at the combination of high-deductible plans with HSAs.
• "HealthBenefitsReform" · A Yahoo online discussion group devoted to "Dealing with Consumer Driven Health Care"