Once a small community bank in Wisconsin, HSA Bank has grown rapidly to $1 billion in assets and 300,000 accounts. Its rapid growth is a testimonial to the growing power of consumer-driven health care.
Dean Mason, CEO of the Sheboygan Falls bank, reported recently that the bank is growing by more than $200 million in assets a year and would hit $2 billion in assets in three or four years. The bank has several individual accounts that have grown to more than $100,000 and more than 100 with more than $40,000.
That accumulation of savings is remarkable since the law creating Health Savings Accounts (HSAs) just went into effect in 2004. An estimated 20 million HSAs are now in place in the country, and there are estimates that there are about the same number of Health Reimbursement Arrangements (HRAs), a similar device for putting power in consumers’ hands.
This constitutes real reform of the business model for the delivery of health care, in contrast to the access and insurance reform from Washington D.C.
“Unions love HSAs,” said Mason, citing the example of 3000 unionized teachers in Douglas County, Colorado. They love it, he explained, because its members get, in effect, first dollar coverage and a cap on medical liabilities for a family.
That happens in Douglas County, because the annual HSA contribution from the district of $2500 matches the deductible.
Further, the plan saved so much money that the district gave the teachers a $2500 raise in year two. “Because employees spend their money first, they behave as better consumers.”
In addition, engaged employees take better care of themselves. They are 50% more likely to participate in health and wellness programs, like disease management, smoking cessation, diet and exercise programs and health coaching.
The concepts work for poor people, too, Mason said. “If you give people (on Medicaid) the money, they will save it.”
Clearly, the race is on to determine whether private sector reforms at the grass roots level, those using HSAs and HRAs, will become more powerful and convincing that than the top-down reforms from the Obama Administration. Will be have market-based health care or a government-run system?
It is now beyond debate that consumer-driven plans reduce costs by about one-quarter and improve health. It is a proven concept that has been subjected to analysis by actuaries. ObamaCare, in contrast, is totally unproven, especially in its ability to reduce costs.