San Francisco, CA, USA
September 22, 2005Health Savings
Accounts: How Will the Stars Align?
Report Published by Celent
Health savings accounts will bring the next wave
of bank-insurance convergence. Banks have everything to gain or lose. HSAs
will generate millions of new accounts (15 million by 2010) and billions
of deposits and assets under management (US$62 billion by 2010).
Rarely does a new financial product come along with
the revenue punch of the health savings account (HSA). By offering a
low-cost health insurance option, the HSA combined with a high-deductible
health plan (HDHP) is poised to take off and lead to a significant shift
in bank and insurance revenues. Around 5% of health insurance premium
revenues will be replaced by net interest, account management, and fee
income by 2010. Evidence of the opportunities unleashed is seen in the
variety of participants clamoring for a role and market share, and in the
diversity of strategies being pursued.
Alenka
Grealish, co-author of the report and manager of the Banking group
at Celent, recommends that banks develop a long-run strategy that
encompasses not only growth in new HSAs but also retention. She added,
"They must apply lessons learned on two fronts: 401(k)s and IRAs.
Part of banks’ long-run stake in the HSA business will be secured by
their offering a variety of investment options that satisfy account
holders whose balances are growing."
Matthew
Josefowicz, co-author and manager of the Insurance group,
observes, "Although a few health insurers, especially those with a
strong history in the individual products area, have moved aggressively
into HSA/HDHPs, all health insurers need to determine their strategies in
this area. For those that make the commitment to grab some of this rapidly
emerging market, they need to make sure they understand the service and
technology implications of this new product class."
The report examines the market dynamics behind the
rise of HSAs, the potential business opportunity for banks and insurers,
and the adjustments in service offerings and technology that are required
to serve the market effectively. The report also highlights the early
successes of key players like JPMorgan, Mellon, Wells
Fargo, HSA Bank (Webster Bank), UnitedHealth, CIGNA,
Assurant, and others.
The 32-page report includes 17 figures and
tables. A table of contents is
available online.
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