Mercator Looks at HSA Growth

The most important of these is the inventory information approval system (IIAS) that will deliver auto-adjudication, significantly reducing administration costs for TPAs while eliminating the need to submit and file records by the cardholder.

This report evaluates the size of the HSA market today and forecasts growth through 2011. It also offers a forecast of the number of HSAs that will likely be candidates for HSA Prepaid cards. Not all Health Spending Accounts will be candidates for a Prepaid HSA card. For instance, many HSAs are under funded. Many have very low transaction rates because the owner perceives the HSA more as an investment account than for health spending. Both of these consumer behaviors will reduce deployment of Prepaid HSA cards.

"It is not just account holder behavior that will delay adoption of Prepaid HSA cards", states Tim Sloane, Director of the Debit Service at Mercator Advisory Group. "The broad acceptance of the inventory information approval system is also critical to the value proposition these cards deliver to TPAs. Every time a transaction is not adjudicated it reduces the cost savings the HSA depends on and frustrates the cardholder. It will be years before IIAS works for services rendered at hospitals or doctor's offices - and these account for 51.7% of all healthcare related expenditures according to the AMA."