NEW YORK—Lively Inc., a creator of the modern Health Savings Account (HSA), has released its second annual HSA Spend Report, which provides a view into how and where consumers spend on health care costs each year. The findings show that 96 percent of annual contributions were spent on expected expenses and routine visits. What this means, according to the Lively analysis, is that “the rising cost of health care is preventing people from achieving the long-term benefits of using an HSA to save for unexpected health events and the high cost of health care in retirement.”

The report also noted that about 5 percent of Health Savings Account money went toward vision and eyewear in 2019.

In addition, the average HSA account holder in 2019 spent their savings on doctor visits and services (50 percent); prescription drug costs (10 percent); dental care (16 percent); vision and eyewear (5 percent); chiropractor (3 percent); lab work (2 percent); and other (1 percent).

Other key findings and trends from the report to note include:

1. While traditional pharmacies lead in health care spending, superstores and online retailers are becoming increasingly popular for consumer health spending. Of the total 10 percent Rx spend, 76 percent of transactions were at Walgreens, CVS and Rite Aid. An estimated 8 percent of spending happened at pharmacies in Target, Walmart, Costco and Sam’s Club. While only a small percentage of HSA purchases occurred through Amazon, the web giant captured a large portion of web and mobile purchases (vs. in-store).

2. Online spending is key for vision and mental health: More than 15 percent of all HSA vision and eyecare spending happened online, dominated by 1-800-Contacts and Warby Parker. Additionally, more than 15 percent of all mental health spending was through virtual experience apps, and/or digital experiences that connect consumers to mental health professionals.

3. Health care spending increased across all categories. Doctor visits and services spending increased moderately by 22 percent, from 41 percent in 2018 to 50 percent in 2019. Dental spending increased 78 percent—from 9 percent in 2018 to 16 percent in 2019.

“High deductible health care plans are the new norm, and that’s not going to change anytime soon,” said Shobin Uralil, chief operating officer and co-founder of Lively. “Combine that with rising health care costs in almost every consumer spend category, HSAs are now vital to affording everyday necessities in this country. As such, we must ensure that Americans with HDHPs take advantage of HSAs to put more savings in their pockets."

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