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Only a tiny fraction of the growing number of people with health savings accounts invests the money in their accounts in the financial markets, a recent study finds. The vast majority leave their contributions in savings accounts instead where the money may earn lower returns.

People who have had their health savings accounts open longer are more likely to invest their contributions, suggesting that there’s a learning curve in grasping how the accounts work and how to use them, says Paul Fronstin, director of the Health Research and Education Program at the Employee Benefit Research Institute and the study’s author.

Forty-seven percent of HSAs with investments were opened between 2005 and 2008. In 2014, just 5 percent of HSAs that were opened had investments.

Since they were introduced in 2004, health savings accounts have offered people with high-deductible health plans that meet certain criteria a way to set aside money tax-free to cover medical expenses. HSA contributions are deposited pretax, grow tax-free and aren’t taxed when distributed if they’re used for qualified medical expenses.

Because of the tax advantages, saving for health care expense in retirement using an HSA may be a better option than using a 401(k) or other retirement savings account for that purpose, say advocates. If an HSA is offered through an employer, both the employer and employee can contribute to the accounts, and the money belongs to the individual if he leaves his job.

This year, plans that link to HSAs must have a deductible of at least $1,300 for single coverage and $2,600 for family coverage, among other requirements.

About two-thirds of health savings accounts offer individuals the ability to use an investment option, says Eric Remjeske, president of Devenir, an investment adviser for health savings accounts.

Yet few consumers are taking advantage of the investment options.

The EBRI study found that 6.4 percent of people with HSAs invested their health savings account contributions in mutual funds or other financial vehicles. The remainder left the contributions in savings accounts, where their money isn’t at risk from market fluctuations. The study examined 2014 data from 2.9 million health savings accounts with $5 billion in assets, covering about 20 percent of the HSA market.

The study didn’t explore why consumers made their HSA choices. However, Fronstin says that in addition to being unfamiliar with how health savings accounts can be used, there may be other roadblocks that discourage people from investing their HSA contributions.

A minimum savings account balance may be required before people can move funds into an investment account, and fees may be charged on the investment account.

And even though people can liquidate their investments at any time generally without penalty, “people may not want to tie up their HSA money in an investment account when they may need it to cover a medical expense,” says Fronstin.

Fronstin is planning to do research to determine how many people use their health savings accounts primarily as an investment or retirement savings vehicle rather than for current medical expenses.

People with investment accounts didn’t refrain from using their HSA for medical expenses, however. Average annual distributions for medical claims were $1,777 for HSAs with investments and $1,293 for those without.

You can contact Kaiser Health News to send comments or ideas for future coverage concerning health insurance.

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Illinois lawmakers set aside their bitter partisan bickering Wednesday to override Republican Gov. Bruce Rauner’s partial veto of bill addressing the state’s heroin crisis.

Illinois has one of the highest rates of heroin overdose deaths in the country, and the Chicago area has led the nation in the number of emergency room visits related to heroin. And as we’ve recently reported, the heroin crisis has been growing worse as state funding for treatment programs has been cut.

The comprehensive Heroin Crisis Act would, among other things, allow the state’s Medicaid program to fully cover heroin addiction treatment.

Illinois is one of the few states that doesn’t allow Medicaid to pay for Methadone and other medication-assisted treatments. Methadone is one of a few drugs that can curb heroin cravings and treat painful withdrawal symptoms. Such medication is considered critical in helping users of heroin or other opioids overcome their addiction.

“It’s a monster, you know,” 47-year old Myron Boyd says of his heroin addiction. “It’s something that I wouldn’t wish on anyone.”

He says Medication-assisted treatment at the PEER Services treatment center in the Chicago suburb of Evanston is a vital part of Boyd’s recovery. “I feel like I’m privileged to be here,” Boyd says. “It’s been a lifesaver for me.”

The Illinois Consortium on Drug Policy estimates about 80% of those needing treatment for heroin or other opioid addictions don’t have health insurance to cover the cost of treatment. By extending Medicaid coverage to opioid addiction treatment, the federal government would have picked up much of the cost in Illinois.

But with the state in a deep budget crisis, Governor Rauner stripped out the measure to save money, as we reported last week.

Supporters call the veto shortsighted, arguing that every dollar spent on treatment saves 12 dollars in state prison, court and emergency room costs.

“In our zeal to save money, we must not forget about human life,” said State Rep. Lou Lang (D-Skokie), the chief sponsor of the Heroin Crisis Act.

Lang urged his fellow legislators Wednesday to override the governor’s veto. “Illinois is ground zero for heroin crisis in America. We’ve had more heroin deaths than any state in the nation.”

The Illinois house debate on the override measure, though brief, was emotional.

“Since this bill was passed just a few short months ago, I have attended two funerals of 25-year-olds who lost their lives to the heroin epidemic,” says State Rep. Kathleen Willis (D-Addison).

One of the funerals was of a constituent in her suburban Chicago hometown, she says, and the other was of a cousin who lived downstate. “There is not enough money that we can spend to save money,” Willis added. “It is impossible to put a price tag on it.”

Most members of the governor’s own party agree.

“Watching another kid left and right dying, overdosing over heroin, sickens me,” says Illinois House Republican Leader Jim Durkin of suburban Westchester. “It brings tears to many of our eyes and we have to do everything within our power to stop this and reverse this before it gets even more pervasive.”

As Amanda Vinicky of Illinois Public Radio reported, many drug treatment providers and advocates had feared the legislation addressing the heroin crisis would be another casualty of the bitter budget battle between Republican governor Rauner and powerful Illinois House Speaker Michael Madigan.

But the Illinois House voted 105-5 to override the governor’s veto.

“Finally people will get the treatment that they so desperately need,” says Kathie Kane-Willis, director of the Illinois Consortium on Drug Policy. “This legislation can be a model for the nation and I hope it will be.”

The override effort now moves to the Illinois Senate.

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