Jun 9, 2017

The big business of health savings accounts

George Hodan / Creative Commons

Republicans view health savings accounts — mechanisms for people to set aside untaxed money to pay for medical expenses — as a crucial part of pushing people to have "skin in the game" and pay for their own health care.

A plethora of HSA providers exist, many of which are run through banks or credit unions. UnitedHealth Group, the largest health insurer in the company, has its own HSA affiliate called Optum Bank. A glance at one of the biggest standalone HSA companies, HealthEquity, shows there's a lot of money to be made at running the relatively low-maintenance accounts.

HealthEquity collects revenue three ways:

From health insurers and employers that want to offer HealthEquity's HSA services. Monthly administrative fees (also known as "custodial fees") paid by insurers, employers or members. Fees from providers every time someone swipes their HSA card.

How HealthEquity is faring: Business has been booming as more employers steer workers into high-deductible health plans that are paired with HSAs. But there's been longstanding criticism that HSAs are another tax shelter that don't help lower-income people who don't have a lot of money to set aside for medical care.

HealthEquity collected $55.4 million in revenue in the first quarter of this calendar year, up 26% from the same time a year ago. The bigger deal is HealthEquity's profit, which jumped 74% to $14 million. That means for every $1 HealthEquity gets for handling HSAs, it gets to keep a shiny quarter. That kind of profit margin is on par with the pharmaceutical industry, which usually has the highest margins in health care.

The Wall Street factor: HealthEquity's stock is up 69% since President Trump was elected. That growth has fattened the pay packages of top executives like CEO Jon Kessler, who took home more than $19 million last year.

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Sign of the times: A pro-Warren super PAC

Democratic presidential candidate Sen. Elizabeth Warren at a rally in Nevada. Photo: Alex Wong/Getty Images

A group of women progressives who back Sen. Elizabeth Warren has formed Persist PAC, a super PAC airing pro-Warren ads starting Wednesday in an effort to boost her performance ahead of Saturday's crucial Nevada caucuses, a spokesman told Axios.

Why it matters: Warren has spoken adamantly against the influence of unlimited spending and dark money in politics. But these supporters have concluded that before Warren can reform the system, she must win under the rules that exist — and that whether she likes it or not, their uncoordinated help may be needed to keep her viable through this weekend's contest and into South Carolina and Super Tuesday.

Go deeperArrowUpdated 1 hour ago - Politics & Policy

Pentagon policy chief resigns amid reported discord with Trump

John Rood. Photo: Mark Wilson/Getty Images

John Rood, the Pentagon's top policy official, will resign from his post on Feb. 28, CNN first reported and President Trump confirmed.

The state of play: CNN said Rood "was perceived as not embracing some of the changes in policy the White House and senior Pentagon officials wanted," such as peace talks in Afghanistan with the Taliban and a decision to cut back on military exercises with South Korea as the president courted North Korea's Kim Jong-un.

Coronavirus cases rise, as warnings of global pandemic grow

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's NHC; Note: China refers to mainland China and the Diamond Princess is the cruise ship offshore Yokohama, Japan. Map: Danielle Alberti/Axios

We may be "at the brink" of a global pandemic, warns a top U.S. public health official, as cases continue to spread despite containment efforts. Meanwhile, the global economy is being affected, including the tech manufacturing industry.

The big picture: COVID-19 has now killed more than 2,000 people and infected over 75,000 others, mostly in mainland China, where the National Health Commission announced 136 new deaths since Tuesday.

Go deeperArrowUpdated 2 hours ago - Health