Statement of CFPB Director Rohit Chopra on Medical Financial Products

In recent years, there are signs of increased involvement by financial institutions in the American health care system. Many medical procedures can be financed by Buy Now, Pay Later loans, medical credit cards, and other medical loans offered in conjunction with health care providers and facilities.

Today, the CFPB has published an analysis about health savings accounts. Health savings accounts, or HSAs, are typically deposit accounts used in conjunction with high-deductible health insurance plans. People with HSAs make tax-deductible contributions, and, in theory, their money can grow over time to be used for health care tax-free and in retirement. Total funds in these accounts reached approximately $116 billion in 2023, a 500 percent increase since 2013.¹

Although Americans can select their HSA, the reality is that people do not typically choose these accounts. Most HSAs are offered through and sold to employers and insurance companies. Consumers often end up with a financial product that was designed to meet the needs of employers and insurance companies instead of health care users.

This “captive consumer” model leads to a number of issues and concerns that are discussed in today’s analysis.

• Health savings accounts typically offer low interest yields. While many banks and credit unions increased the interest they paid to depositors, we found that health savings accounts offered yields that have remained quite low.
• Consumers also face obstacles and fees when seeking to switch. If a consumer changes jobs or switches health insurance plans, their new provider may open a different health savings account for them. Today’s analysis discusses how providers of health savings accounts charge exit fees when seeking to close or rollover to another provider. This can serve as a strong deterrent to switch, especially for those with small balances.

It is clear that HSA providers are competing on ways for insurance companies and employers to steer consumers to their products, rather than competing on key terms like higher savings yields and an attractive fee structure. Even if a consumer selects an HSA with superior terms, the consumer may still need to separately manage the account opened by the insurance company or employer.

We have identified similar challenges where products are selected for a consumer, rather than selected by a consumer.² The CFPB will continue to identify ways to promote competition and fairness in these markets.

More broadly, the CFPB is closely policing the intersection of health care and financial products, which increasingly resembles longstanding trends in higher education, where there have been serious abuses in lending and financial products, particularly where colleges and universities steered or preferenced particular products.³ We are focused on ensuring that health care financial products do not follow the same path.

Footnotes

1. In 2013, there were $19.3 billion in HSA assets. 2023 Midyear Devenir HSA Research Report (devenir.com) .
2. See the CFPB’s enforcement action against JPay, report on the criminal justice financial ecosystem, and report on college-sponsored financial products.
3. See student loan kickback scandal and enforcement action against Higher One.