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Ignagni: 'Young Immortals' Aren't Dominating HSA Enrollment

MARCH 9, 2006 -- The head of the nation's largest health insurance lobby said Thursday that data on enrollees in a new type of health coverage do not bear out predictions that it will be dominated by young and healthy people, which critics said would make traditional coverage unaffordable for older and sicker Americans.

In a phone call with reporters, Karen Ignagni, president of America's Health Insurance Plans, said roughly half the 3.2 million people who have enrolled in the new coverage were at least 40 years old.

Ignagni was referring to enrollment in high-deductible health plans that the lobby links to sales of health savings accounts (HSAs). HSAs are touted by the Bush administration as a way to control health costs by giving individuals a greater stake in health care spending decisions.

"Flat expectations that this would be for the young immortals is not borne out by the data," Ignagni said. She said she was referring to people in their twenties who do not expect to incur health costs.

The AHIP survey found that 50 percent of those enrolled in HSA-compatible plans obtained in the individual market were 40 or older, 45 percent of those in such plans obtained through small employers were in that age bracket; and 44 percent of enrollees in policies obtained through large employers were that old.

HSAs are financial accounts funded by individuals or employers. They are used to pay out-of-pocket health care expenses. To qualify for the accounts, an individual must enroll in a high-deductible health plan.

Ignagni said AHIP didn't track actual HSA sales because those data are proprietary and difficult to obtain.

Edwin Park, an analyst with the liberal policy analysis group Center on Budget and Policy Priorities, disputed the findings.

"In fact, a recent survey conducted by the Employee Benefits Research Institute and the Commonwealth Fund as well as studies by the Government Accountability Office indicate that healthier, high-income people may be disproportionately using HSAs as compared to those enrolled in other coverage."

The new data also show that the plans are a noticeable newcomer in the health insurance market. The plans made up 23 percent of all new health insurance policies sold in the individual market, 11 percent of those in the small-employer market, and 7 percent of those in the large employer market.

AHIP said HSAs appear to be a vehicle that has brought health coverage for the first time to at least some small employers. The study found that 33 percent of policies purchased by small employers were bought by companies that had not previously provided health coverage. The study did not examine how many small employers, if any, might have dropped coverage because of HSAs.

More than 90 percent of the health plans in the survey were preferred provider organizations, which Ignagni said provided comprehensive benefits. The finding refutes predictions by critics that plans sold with HSAs would offer inadequate benefits, she said.

Ignagni said enrollment in the plans has risen sharply since HSAs first reached the market. Enrollment has grown from 438,000 in September 2004 to about 1 million in March 2005 and 3.2 million in January 2006.

"I have a hunch we are talking about a very significant majority" of high-deductible plan enrollees who have HSAs, she said.

The AHIP analysis also did not track two other factors—health status of enrollees and their income levels—that may be more significant factors in determining whether HSAs make health care less accessible.

Data about the health status of HSA enrollees would indicate whether they are unusually healthy and data on income would indicate their ability to cover large deductibles.

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