Getting into the insurance business could be a way for banks to increase their deposits and capture billions of dollars previously paid to health plans in the form of premiums, says James Knight, M.D., chairman of 1st Pacific Bank of California and CEO of Consumer Directed Health Care, Inc., a consumer-directed health (CDH) consulting firm.

Here's an excerpt from his testimony:

...Most of what you have been told in the testimony to date is either mistaken, based on suppositions or surveys of uninformed people, or simply irrelevant to Health Savings Accounts. For example –

As evidenced in the report, Q1 2008 realized significant quarter-over-quarter growth in average funds held in both HSA deposit and investment accounts - as high as 25% for deposit accounts - indicating that Health Savings Accounts are being used as savings account vehicles with larger average balances than the average retail checking account.

Current law requires Health Savings Account holders to document their withdrawals in the event of an IRS audit. The new legislation would require every Health Savings Account holder to document every HSA-qualified withdrawal, every time they file their taxes.

The legislation also allows you to use of existing funds in your IRA as a source of tax-free contribution to your existing Health Savings Account.

"The use of Health Savings Accounts has grown dramatically over the past two years - a 35 percent increase since last year," said Rob Price, senior vice president of marketing for CVS/pharmacy. "But many consumers don't realize that managing their funds throughout the year can be simple and, more importantly, can result in significant cost-savings, particularly for those with chronic conditions."

Health Savings Accounts consist of two parts - the high deductible health plan (HDHP), and the Health Savings Account (HSA) itself. By carefully choosing which bank you use to establish your HSA, and strategically choosing how to fund your account and manage your investment, you will be able to get the most return on your money while keeping your expenses to a minimum.

The census found that 27 percent of those purchasing HSA plans in the individual market were previously uninsured and almost half of those enrolled in such plans were older than age 40.

In order to participate in an HSA, a person must be covered by a high-deductible health plan (HDHP), which is a type of insurance plan that typically has lower premiums than a traditional plan, but has a much higher deductible.

Indeed, for many families with yearly medical expenses of about $1,500, the total savings often exceed $6,000 a year, which includes tax reductions of $1,500 or more, as well as health insurance premium savings. Lets take a closer look at Health Savings Accounts:

The census found that 27 percent of those purchasing Health Savings Account plans in the individual market were previously uninsured and almost half of those enrolled in such plans were older than age 40.

Experts say the increased demand comes from consumers who want more control over their health care. And those customers are using Health Savings Accounts to do just that.