Consulting group Financial Insights predicts that 2007 will bethe year health savings accounts (HSAs) take off. In a July report,the Framingham, Mass.-based firm is projecting an almost 10-foldsurge in assets in HSAs by 2010, to $48 billion from $5.1 billionlast year. But it is taking a confluence of high-profileendorsements and sophisticated new payment and settlement tools tomake it happen.

HSAs let consumers, enrolled in high-deductible health plans,set aside pre-tax dollars for future medical, retirement orlong-term care expenses. The HSA account holder can invest thesefunds in a range of choices, and then use them for qualifiedexpenses. The funds roll over from year to year and you can takethem with you when you change jobs. The premise is that HSAs giveconsumers control over their own healthcare management andspending.

For companies, HSAs represent potential cost savings. Premiumsfor HSA insurance offerings are as much as one-third lower thancomparable preferred provider option (PPO) and non-HSA,high-deductible plans, according to a survey by consulting companyInformation Strategies Inc. But, despite these pluses, adoption todate has been slow.

Two factors are working together to give HSAs a boost. First,financial services companies that maintain HSAs are partnering upwith credit card providers to offer debit cards exclusively for HSAtransactions, notes Dana Gould, Financial Insights senior researchanalyst for payments and author of the Financial Insights report.“The HSA card is intended to replace cash and checks at the pointof service delivery as a prelude to a more sophisticated system ofprocessing and paying claims,” he says.

A more sophisticated system has been needed to simplify what isnow a time-consuming, paper-intensive recordkeeping process. Newdebit card technology lets providers transmit and receive claimsdata–in real time–without having to go through a claimsclearinghouse. Doctors get their payment immediately, and companiesdon't have to maintain file cabinets full of receipts andsettlement information.

At the same time, HSAs are also winning endorsements frompowerful employers and insurance industry representatives. Thenation's largest employer, Wal-Mart Stores Inc., likes the idea somuch it is not only offering an HSA option to all its 1.3 millionfull- and part-time employees, but it has recently doubled thedollar amount of its contributions to employee accounts.

The family of Blue Shield and Blue Cross benefit providers alsointends to reach out to all its 100 million members in 50 states incoming years with HSA options. The Blues have even launched a bankto handle healthcare-related finance operations.

To date, as many as 1,200 financial institutions–mostly banksand insurers–have been established to maintain HSA accounts forconsumers. But this year alone, Gould says, that number shoulddouble. “It's an idea whose time has come,” says Gould.