Celent: $250 Billion Opportunity for Healthcare Payment Cards

Financial research and advisory house Celent reports that consumer payments in the healthcare market is on the verge of moving to a card-based approach that would mean “an evolution toward more sophisticated functionality, increased automation, and greater integration of healthcare information.”

Celent’s “The Healthcare Payment Card Ecosystem: Version 2.0” report found that consumers will make about $250 billion in out-of-pocket medical payments this year, making it a potentially lucrative opportunity for the payment card industry. 

An estimated 2.5 million Health Savings Accounts (HSAs) exist, with 95 percent of them card-enabled. Card spending is roughly $2.5 billion.

Meanwhile, there are over 19 million flexible spending accounts, known as FSAs. Celent estimates that over 16 million FSA cards will be in circulation in 2012. Approximately 30 percent, or 5.7 million, of FSAs today are card-enabled, representing close to $5 billion in out-of-pocket payments, more than double those of HSAs.  

Acronym number three is the Health Reimbursement Account (HRA) cards, which are used for another $255 million in healthcare payments.  

Strip out these numbers and there remains $242 billion in consumer healthcare payments that are currently not paid with healthcare payment cards, Celent reports. Celent predicts a rise in multipurse cards from an average of 15 percent of all card-enabled healthcare spending accounts in 2007 to about 54 percent of all such accounts in 2012. 

“The healthcare payment card ecosystem has historically placed priority on convenience,” Red Gillen, senior analyst at Celent and author of the report, said in a statement.