Survey: HSAs are an evolving health care cost solution

Destiny Health conducted a survey of 1,000 Americans to determine their familiarity and interest in health saving accounts, as described by President George Bush in his State of the Union address.

Destiny, a consumer-driven healthcare provider, and its South African-based parent company, Discovery Health, have offered a product similar to HSAs for more than a decade.

The bottom line
— Americans want HSAs, but don’t have enough information about them, or simply can’t find them (USA Today, Jan. 26, 2004: Consumers have trouble finding health savings accounts; Few insurers offer them, and rules are still evolving.).

— The same people who say they are most interested in this type of account are least likely to be familiar with HSAs.

— Studies conducted by Discovery, an international company with an HSA-like consumer-driven policy that has been available in overseas markets for 12 years, and Destiny Health, have found that the company’s 1.5 million members pay 7.1% less per prescription and incur 27% lower prescription costs overall than do individuals with traditional insurance.

Surveys conducted by Destiny Health confirm that consumer-driven plans can even inspire members to live healthier lives. For example, one study found that while 70% of its Destiny members had started an exercise or nutrition program within the preceding year, the total for non-members was barely 32%.

The whole story
— About one in three American adults (36%) say they are familiar with the type of health savings account mentioned by President Bush in his State of the Union speech, which are designed to help individuals save for qualified health expenses that they, their spouse or dependents incur.

— Awareness of health savings accounts is far higher among better-educated and more-affluent Americans. Half of those with a college degree (52%) are aware of the accounts, compared with only 21% of those with only a high school education or less.

Similarly, half of those in households with annual incomes of $75,000 or more are aware of health savings accounts, compared with 40% of those in households earning $50,000 to $74,999 and only 27% of adults in households earning less than $50,000 a year.

— About four in 10 adults with health insurance (39%) are aware of the accounts, twice the percentage as among those without health insurance (19%).
Interest in
health savings accounts
— Two in three Americans (66%) say they would be extremely (15%), very (21%) or somewhat interested (31%) in having a tax-free account that is designed to help them save for qualified health expenses for themselves, their spouse or dependents. Only 12% are not very interested and 19% are not at all interested.

— Interest is highest among 18- to 44-year-olds (76%), but is high among 45- to 64-year-olds, as well (64%); however, only 39% of those 65 and older are interested in this type of account.

— Those without health insurance are more interested in health savings accounts than those with health insurance (77% vs. 64%).

— The same people who are least likely to be aware of health savings accounts are also most likely to be interested in having a tax-free account of this nature.

— Among young people, aged 18-24, only 18% are familiar with HSAs, but 72% would be extremely (16%), very (27%) or somewhat (29%) interested in having one. Among people between the ages of 25-34, 31% are familiar with HSAs, while more than three quarters (78%) say they would be extremely (16%), very (26%) or somewhat (36%) interested in having this type of account.

— Minorities are less likely to be familiar with HSAs than white Americans (White: 39%; Black: 23%; Hispanic: 16%), but more likely to be interested in having this type of account (White: 65%; Black: 79%; Hispanic: 80%).

Feb. 20, 2004 Small Business Times, Milwaukee

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