Morningstar: HSAs and Retirement Healthcare Costs

Healthcare is one of the most persistent variables in retirement. It rarely shows up as a single event—it tends to arrive as an ongoing set of premiums, out-of-pocket expenses, prescription costs, and “surprise” spending that is hard to predict year to year. Morningstar’s 2025 Health Savings Account (HSA) Landscape report is useful because it focuses less on hype and more on practicality: how the HSA marketplace is changing, how providers differ, and why those differences matter when an HSA is intended to support long-term planning.

HSAs Are Growing—and That Growth Is Reshaping Expectations

Morningstar’s annual HSA study reflects a continuing trend: HSAs are no longer treated as niche benefits. As balances grow, more account holders are looking for better tools, clearer pricing, and smoother user experiences. That matters because HSAs often start as spending accounts, but many households later realize that healthcare costs in retirement can be large enough to justify a longer-range approach.

In other words, the question shifts from “How do I reimburse this expense?” to “How do I keep this account flexible and efficient over time?”

Provider Differences Can Affect Outcomes More Than People Expect

Morningstar evaluates providers across common use cases—accounts used primarily for near-term spending and accounts intended for long-term investing. The practical point is that provider design choices can shape results: fee clarity, transaction friction, investment access, and minimum requirements all influence how easy (or hard) it is to use the HSA the way you intend.

When an HSA is held for years, small frictions tend to compound. That makes provider selection a planning decision, not just an administrative one.

Cash vs. Investing: The Use Case Should Drive the Setup

Many people default into an HSA through an employer plan and never reassess the structure. But HSAs often support two distinct purposes: (1) paying current medical expenses and (2) building a dedicated reserve for future healthcare costs. Those goals may require different provider features and different account habits.

The report underscores a common theme: an HSA can be used effectively in either role, but alignment matters. If the account is intended for longer-term use, investing access, fee structure, and usability become more important.

Why This Matters for Retirement Income Planning

Retirement planning tends to focus on income sources and spending needs. Healthcare costs can disrupt both. An HSA—when structured intentionally—can act as a dedicated bucket for qualified medical spending, which may reduce pressure on other retirement income sources during years when costs rise.

The larger takeaway from Morningstar’s report is simple: HSAs are part of the retirement planning conversation because healthcare is part of retirement—every year, not once.

Source: Morningstar, Inc. Original press release published October 16, 2025.
Read the original press release.