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GAO Report Is A "Half-Full, Half-Empty" Analysis Of HSA Users With Data Going Only As Far As 2005

In reviewing the just released GAO study of HSAs, there is much to be pleased about and some caveats.

The study is published and available as a downloadable PDF file here.

The April 1 report by GAO supports data from Information Strategies, Inc.'s (ISI) ongoing research as well as other industry publications in that they show a huge increase in HSA accounts and covered lives over the past three years.

Its studies, and those of others, actually surveyed HSA users and are more up-to-date than the GAO report which centers on 2004 and 2005 data.

Unfortunately, the one defect in the report is missing IRS data from later years, apparently due to timing of the release two weeks before the tax deadline.

The result: average taxable income for HSA owners, according to the GAO is for 2004-05 -- before most Americans went into HSAs.

ISI's studies show that for the year's 2006 and 2007, incomes of users is more fully distributed along both low, middle and high income families.

Some industry stakeholder question the timing of the release, before more recent data could be included. They argue the following:

  • Why was the IRS for some reason not able to come up with more recent data than tax year 2005? For instance, the tax returns for the following year, which will show the average incomes of HSA owners falling over 2005, were suspiciously missing.
  • The GAO data on incomes of HSA owners as it stands lags what industry data indicates is a significant change from original HSA users, many of whom rolled over MSA accounts.

ISI was among the three groups cited in the report as providing data and its staff offered more recent information.

Some industry observers claim that the GAO report itself totally refutes the conclusion that HSA owners have higher incomes, based on the new AHIP census. The first year data on HSAs only shows a highly-skewed taxpayer sample.

This report creates somewhat of a dilemma for HSA supporters. GAO itself is neutral on HSAs and will certainly have a different conclusion about income levels in future reports.

But the study, according to industry observers, was requested by HSA enemies who will ignore GAO data and findings and focus exclusively on the least-defensible conclusions.

Consumer Directed Healthcare Report cited the following in its analysis of the report:

  • The GAO report data on average income of HSA owners represents less than 10% of Americans with HSAs.
  • The number of HSA tax returns from Americans with HSAs is at least 20 times greater this year than the ones sent to GAO.
  • The average income for HSA owners is completely wrong since it is based on a known biased sample of taxpayers.
  • The average taxpayer is different than the average American with health insurance, so the entire comparison is phony.

Another question bothering some stakeholders was the fact that the report was dated April 1 but not released until AHIP published its own numbers in early May. 

Visitors may read the report themselves here.

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