Our latest tally of the consumer-directed health plan market shows membership growing at a 35% clip, which would suggest that by January 2009 about 16 million people will be enrolled in a plan tied to a health savings account (HSA) or health reimbursement account (HRA). That amounts to about 6% of the insured population in the U.S.
It’s a faster rate of growth than we expected earlier in the year. But it doesn’t look like CDHPs will reach the lofty goals predicted by some analysts, who had suggested they could account for 20% to 25% of the market by 2010 or upwards of 65 million members. (That’s about the size of the current HMO market).
Back in October 2005, we had said that CDHPs could be 15% of the market or 39 million lives by 2010. (Man, do we hate looking back at our old projections). Even at the current rate of growth, it would take until January 2012 to hit 15% and that’s not likely.
Proponents of CDHPs (and HSAs in particular) often cited the explosive growth of the 401(k) market as an analogy. The thinking goes like this: if personal ownership of stocks could revolutionized how we save for retirement, why can’t personal health savings transform how we fund medical expenses. With most 401(k) portfolios in the dumps, now is not a good time to make that argument.
As you may have guessed, I’m resorting to the old “change in national psyche” argument to suggest a dramatic slowdown in CDHP growth in the near future. The “ownership society” is out. Shared responsibility is in. I’m guessing that consumer choices and government policies will reflect the new thinking.
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