Health savings accounts (HSAs) have been around since the early 2000s, but that doesn't mean consumers understand how to use them or other tax-advantaged healthcare accounts, according to a new survey of health professionals.
The idea behind HSAs is to provide consumers with incentives to manage their own health care costs through a federal tax-free savings account to pay medical expenses with a high-deductible health plan. Yet, despite increasing enrollment in these accounts, a survey of more than 300 healthcare- industry professionals, conducted by Acclaris Corp., confirmed a “clear lack of consumer knowledge about consumer-driven healthcare accounts – especially health savings accounts.”
HSAs were first introduced in 2003 as part of the Medicare Prescription Drug Improvement and Modernization Act. An annual census by American’s Health Insurance Plans of U.S. health companies showed that 17.4 million people were enrolled in a health savings account/high-deductible health plan as of January 2014.
The number of enrollees has been increasing at an average annual growth rate of 15 percent since 2011. The monthly average premiums range from $371 for single coverage to $835 for families, according to the US Census.
Poor education leads to confusion
Seth Ravine, chief revenue officer at Acclaris, said the most surprising survey finding was that HSAs create the most confusion in the marketplace. “It was surprising to us because of the way you can apply those accounts, and because it’s your own money," he said.
Most survey respondents showed no confidence in the average consumer’s understanding of not only HSAs, but also health reimbursement accounts (HRAs) and flexible spending accounts (FSAs). Overall, 64% rated the understanding it “mediocre,” and 28% rated it “poor.” The biggest barrier to adoption of these accounts, according to 63% of those surveyed, was a lack of education.
The second big survey surprise, according to Ravine, was that more than half of those responding thought that employers should be responsible for educating consumers versus 21% who thought insurance brokers should have the responsibility.
“The employer trend now is to push away from benefits, to distance themselves from even being in the benefits business," he said. "For example, mid-sized employers are going to push more employees out into exchanges and give them some sort of contribution to go and select their own plan.”
He added that the healthcare industry shift from employer-based insurance plans to consumer-driven health plans has been a radical change.
“The transition in healthcare is happening faster than individuals are understanding and all of a sudden they have to make their own decisions and choices. There seem to be some old habits of relying on the employer, and that’s going to have to shift because the employers aren’t the best ones to do it, and I don’t know if they are as motivated as they once were to educate about benefits.”
The trend of consumer-driven health and the notion of consumerism said Ravine, “has just taken on a life of its own.”
“There are a lot of great companies doing great things to help bring tools and awareness of how to use the healthcare system,” he said. Some of these include transparency tools, treatment decision support tools that health plans provide and online tools.
“What we are trying to define at Acclaris are the areas we can impact consumerism,” explained Ravine.
One of the critical gaps in consumer knowledge about consumer-driven health plans is understanding when HSAs can or should be used, according to 32% of respondents. Others included understanding which expenses are reimbursable (20%) and when to use healthcare accounts (18%).
Education challenges
More than half of survey participants pointed to consumers’ passive role as one of the top challenges for consumer education and engagement.
“This is really the notion of people not fully understanding how to use their benefits. An example would be someone with a high deductible health plan that doesn’t select a health savings account. It’s people not taking action where they probably could have,” explained Ravine.
The survey asked which communication methods worked the best at educating consumers, and email was ranked as the “most loved” at 26% versus social media which took the highest “loathe” rating at 28%. Best to worst ranking was: email, online help, benefits portal, seminars/peer forums, chat, text, telephone, social media.
Pop-up tips were the most “loathed” content type and interestingly, one-on-one conversations ranked highest on the “love” scale at 38%. More than half of respondents agreed that consumers need ongoing education in the benefits process and throughout the year. Only seven percent thought providing information at enrollment was sufficient.
Ravine said Acclaris is looking at how to better educate people by incorporating their income data and claims history to make better financial decisions. He said paying out of pocket for medical expenses provides an opportunity for behavioral changes that benefit health.
He said Acclaris wants to focus on how to inform consumers of decisions they could have made to stretch their dollars further or use the healthcare system in a more efficient way.
“This is a ‘what-if’ scenario – if you had done this, you would have had x more dollars. In healthcare, I think there’s a lot more chances for ‘what ifs’.” Ravine concluded that “as data gets cleaner, easier to access, and people become more willing to share it, there are so many great things the healthcare industry can do.”