HSA Withdrawals Increased by 13% in 2024

While health savings accounts are becoming more numerous and plentiful, most of these accounts’ assets are going to annual medical costs, according to health benefits provider Lively Inc. In a recent study of its own HSA account holders, Lively found that 80% of the accounts’ assets were spent over the course of 2024.

On average, Lively HSA holders withdrew $1,320 in 2024, marking a 13% increase from the previous year. Lively’s report mirrors a June study from the Employee Benefit Research Institute that found that one-third of HSA holders withdrew more than they contributed in 2023.

Individual health care costs became more expensive last year, as 15% of Lively customers’ HSA transactions were spent on prescription drugs, up from 13% in 2023. Hospital spending also increased to 15.79% of HSA spending in 2024 from 15% in 2023.

Lively’s funded HSAs still ticked up slightly for an average of $4,923 in 2024, up from $4,885 in 2023.

Overall, the average HSA account fell to $3,639 in 2024 from $4,177 in 2023, according to reports by HSA investment solutions provider Devenir Group LLC.

Health Care Costs Negatively Influence Savings

A large majority of surveyed Lively HSA holders shared concerns about rising health care costs, as 84% said it kept them from reaching financial goals, and 83% said health care costs made it difficult to save for retirement.

Concerns about health care costs also impacted survey participants’ medical decisions, as 63% said they skipped doctors’ visits, 59% avoided treatment and 56% delayed or skipped medications as a result.

Health care costs kept 78% of survey participants from taking financial actions like building an emergency fund or paying off debt. One-quarter of surveyed respondents aged 18 to 34 said they were unable to buy a home due to health care expenses.

Lively studied the 2024 debit card expenditures of a randomly selected group of their HSA account holders. CITE Research also conducted an online survey in March with 1,000 full-time employees on behalf of Lively.

More than 59.3 million Americans were covered by an HSA at the end of 2024, according to a report by Devenir. The report also found that the number of HSAs grew by 5% from 2023 to 2024, and account balances rose 19% in the same period.