SAN FRANCISCO--(BUSINESS WIRE)--Lively, Inc., creators of the modern Health Savings Account (HSA), today released its third annual HSA Spend Report, giving a view into how and where consumers spend on healthcare costs each year. Findings show that the COVID-19 pandemic had a serious impact on HSA spending in 2020. The average account holder's routine visits saw a sharp decline when compared to 2019: doctors visit and services (-3%), hospital (-9%), lab work (-15%), and dental spending (-9%). There were also large spending increases for prescription drugs (+32%) and chiropractic care (+20%). Even with so much fluctuation in the way customers used their HSAs, one element remained steady -- rising healthcare costs.
Why did the spending shift?
The pandemic left many Americans feeling panicked about the unknown. COVID-19 restrictions and the postponing of non-essential procedures led to decreased doctor visits, hospital spending, and lab work. An increase in prescription spending resulted from reactive stockpiling at the start of the pandemic. In March, speculative treatments for COVID-19, such as chloroquine and hydroxychloroquine, caused a surge (+125%) in prescription spending across the country. Anti-anxiety, anti-depression, and sleep medication orders increased as the length of stay-at-home orders were extended. The spike seen in chiropractic care likely comes from the rise in sedentary lifestyles and the result of improper ergonomic set-ups as people worked from home.
"COVID-19 has left millions of Americans feeling uncertain about their financial futures. Many have had to dip into their long-term savings to stay afloat," said Shobin Uralil, COO and Co-Founder of Lively. "While HSA account holders may have spent their money differently to adapt to the pandemic this year, rising healthcare costs are still making it tough to save for things like retirement. It's never been more important to ensure that people with HDHPs know about their potential savings opportunities to get back on track for future health events."
Other key findings and trends to note:
- HSA account holders are spending, not saving: Expected costs, routine visits, and prescription drugs account for 86% of annual HSA spending.
- The cost (and share) of hospital care is on the rise: Although national and HSA spending were down for hospital care due to the cancellation or postponement of elective procedures in response to COVID-19, the decrease was proportional.
- National pharmacies dominate prescription spending, but 'superstores' gained market share: In-store purchases, led by the larger national pharmacies (Walgreens, CVS, and RiteAid), still dominate the pharmaceutical market. Between 2019 and 2020, 63% more HSA account holders chose to fill prescriptions in 'superstores' (Walmart, Target, Costco, and Sam's Club), likely spurring from the convenience and decreased exposure to COVID-19.
- Mental health spending remained steady: While the amount of mental health spend did not increase, how consumers accessed help did see an increase in virtual mental health experiences from 15% in 2019 to 16.3% in 2020.
- Contactless payments are accelerated in the health industry: When health payment decisions were made, more individuals chose the most physically safe opportunity at the point of sale than in the past. This includes choosing online versus in-store purchases and completing doctor service visit transactions with a contactless card or mobile wallet.
"It remains unknown whether new trends or changes in health spending due to COVID-19 will be permanent," continued Uralil. "But no matter what, HSAs will continue to be vital for American families to shelter themselves from rising out-of-pocket healthcare costs. Raising HSA contribution limits, expanding HSA eligible expenses, and letting more Americans take advantage of HSAs would help put more savings into the pockets of people across the country."
Lively is the modern HSA experience built for—and by—those seeking stability in the ever-shifting healthcare landscape. By harnessing modern innovation and deep industry expertise, Lively is committed to bridging today's savings with tomorrow's unknowns. Unlike traditional institutions hindered by bureaucracy, Lively's commitment extends beyond initial set up to providing dedicated, ongoing support and education for every step. So each HSA can reach its maximum potential with minimal headache. Lively is headquartered in San Francisco, CA. For more information, please visit Livelyme.com or follow us on Twitter (@LivelyHSA).