The CDH market is set to grow at a steady pace over the next three years as HSAs and HRAs replace FSAs.
Boston, April 4, 2012 – A new report from Aite Group provides an overview of the consumer-directed healthcare (CDH) market, including health savings accounts (HSAs), health reimbursement arrangements (HRAs), and flexible spending accounts (FSAs). Based in part on 15 Aite Group interviews with top custodians and prominent CDH vendors, ongoing industry discussions, and Aite Group’s proprietary CDH market-sizing model, the report provides a detailed breakdown of current and anticipated growth and discusses potential revenue for each account type through 2015.
During the past two years, the U.S. CDH industry has been growing at a steady 25% CAGR. Though slower than the previous four-year period, the percentage growth of the CDH industry is expected to level out as the number of accounts rises. HSAs and HRAs continue to rise in adoption, a trend that will continue as the market moves from a defined-benefit to a defined-contribution model wherein employers will determine a fixed contribution toward an employee’s healthcare premium. Starting in 2014, there is a higher likelihood that consumers will buy high-deductible health plans (HDHPs) due to their affordability. Health plans, banks, and CDH vendors will push HSAs to go along with HDHPs—to encourage consumers to utilize their healthcare dollars prudently and promote long-term saving for healthcare—increasing adoption of HSAs in 2014 and 2015.
“Aite Group expects the CDH market to grow at a steady pace—approximately 31% CAGR over the next three years—despite a decline in the adoption of FSAs,” says Kunal Pandya, senior analyst with Aite Group and author of this report. “FSAs have long been the most popular form of CDH, but this trend will change as adoption shifts toward HSAs and HRAs.”
This 46-page Impact Report contains 52 figures. Clients of Aite Group’s Health Insurance service can download the report.