## HSA Users are Spending, Not Saving The majority of HSA contributions are spent on routine healthcare visits, but show a shift toward online retailers and digital health experiences. ### The Rising Cost of Healthcare + High Deductible Health Plans In 2019, 36 percent of American household costs went to out-of-pocket medical care. Needless to say, this has serious implications on the wellbeing of American families and the future of our economy -- and it’s only expected to get worse. Over the last decade, healthcare spending has been [rising year-over-year](https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/index) (4.6 percent), with costs rising faster than the annual rate of inflation. Driven by rising healthcare costs, employers are increasingly moving to high deductible healthcare plans (HDHPs). HDHPs are no longer a trend in healthcare -- they are the norm. Almost half (46 percent) of employer-sponsored health plans are now high deductible offerings. Adding direct to consumer health plans, which are mostly HDHPs as well, through state-exchanges and other direct to consumer health plans options, it’s clear that HDHPs are now one of the most common health plans on the market. This move to cut costs has put more pressure on the average American consumer to spend more of their savings on everyday health expenses.

Download the HSA Report

## HSA Consumer Spending Habits HSAs can be split into three categories of account capabilities: savings, investments, and spending. The average HSA account holder will spend 96 percent of their annual contributions on qualified medical expenses. This excludes any year-over-year carry from their existing HSA savings or investments. In 2019, Lively HSA spending was used for medical (81 percent), dental (16 percent), and vision costs (3 percent). Surprisingly, these costs are focused around expected and typical healthcare costs -- such as preventative care and regular doctor visits -- rather than hospital visits. The typical Lively HSA account holder averaged 13 spend transactions per year. This is just above the average HSA account holder, likely correlated to the higher than average account balance of a Lively account holder vs. an [average HSA account holde](https://www.devenir.com/research/2019-midyear-devenir-hsa-research-report/)r. The average Lively HSA account holder spent $117 per transaction, on par with the average HSA account holder.  The most obvious, yet important discovery of this spend data, is that we can clearly see that HSA funds are used as they were originally designed and intended, for yearly medical expenses. When expected medical, dental, and vision expenses are combined, over 70 percent of all HSA funds are being used for yearly expenses. Combined with prescription drug spending, that jumps to 80 percent. We would expect this distribution to climb even further, as yearly service-based medical costs continue to increase. While using HSA funds for regular and expected medical services reduces overall out-of-pocket healthcare spending (when compared to those without access to an HSA and the triple-tax savings that come with it), more education is required to help HSA account holders understand the benefits of saving and investing their annual contributions for the long-term.

Download the HSA Report