Highmark Issues Health Care Gift Card

I can’t let the week go by without commenting on the story that appeared Monday in The Wall Street Journal about the Pittsburgh-based health plan, Highmark, announcing that it is selling a Healthcare Visa Gift Card. That’s right, a gift card like the ones you buy at the appliance giant Best Buy or at your favorite book store, only this one is to pay for health care. Very interesting.

According to the article, the card will be restricted to certain merchant codes so that they can only be used at medical providers or merchants that Visa categorizes as health related, including physician’s offices, pharmacies and health clubs. At least for now the cards aren’t available at grocery or retail stores — they can only be purchased online or by calling a toll-free number.

Who will buy these cards loaded with $25 to $5,000? Highmark believes that the card will fill the needs of many people who want to help others — from college students to baby boomers — with various expensive health-related needs. They expect to sell “several hundred thousand” gift cards, mostly between $75 and $100 over the next year.

Having spent two days last week at the Visa Prepaid Card Forum in San Francisco, I am a big fan of using the latest prepaid and debit card technology to make paying for healthcare easier. Over the next few years, millions of these cards will be issued to make using Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs) and Health Spending Accounts (HSAs) more convenient for consumers.

New IRS regulations requiring retailers who want to participate in this huge market to maintain a special inventory system to flag eligible expenses will take the guesswork out of using account based plans. It will also reduce the need for consumers to file claims or send receipts to their plan administrator to prove the card was used appropriately.

But, a healthcare gift card? I am not sure. It strikes me that Highmark is doing this because they can, not because there is a pressing consumer need for such a stored value card. However, it is innovation and worthy of taking note.

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