How benefits leaders can support employees during the cost-shifting crisis
Our healthcare system is experiencing a vicious cycle: hospitals provide care for the uninsured. These providers charge more to the insured population to stay profitable. Employers, as the primary gatekeepers to healthcare, take on the financial burden. They shift costs to employees to relieve the load.
In short, everyone is passing the buck until — inevitably — it’s the consumer who faces the consequences of reduced coverage, rising premiums, higher copays and larger deductibles. The Kaiser Family Foundation released a report this month that reveals what’s happening as a result of this cost-shifting crisis: More than four in 10 workers enrolled in a high-deductible health plan report they don’t have enough savings to cover the deductible.
One in six Americans who get insurance through their jobs say they’ve had to make “difficult sacrifices” to pay for healthcare in the last year, including cutting back on food, moving in with friends or family, or taking extra jobs.
Half of survey respondents said costs have forced them (or a close family member) to delay medical appointments, not fill a prescription or postpone medical care in the last year.
These statistics should be troubling for any business leader. We’re now at a point where healthcare costs are employees’ No. 1 financial concern — outranking debt, college expenses, mortgages, rent, retirement, taxes and even unemployment.
So what can today’s leaders, especially those in the benefits space, do to better support their employees? Here are three actionable tips:
1. Fully fund all eligible employees’ HSAs with the amount of their deductible. It seems simple, but funding employees’ health savings accounts can have a significant impact on not only how they perceive HDHPs, but also how prepared they feel for future unexpected healthcare expenses.
If you’re wondering how you’re going to justify this investment to your CFO, reflect on this: fully funding your employees’ HSAs with the amount of their deductible may still be less expensive than administering a lower deductible plan — and any employer contributions you make are deductible as a business expense to your company.
See also: IRS increases 2020 HSA limits
Also, aside from the direct benefits of contributing to your employee’s HSA, consider the indirect effects. A study by AHIP found that 56% of U.S. adults with employer-sponsored health benefits said that whether or not they like their health coverage is a key factor in deciding to stay at their current job, and the main reason why 82% of respondents don’t feel satisfied with their current health plan is due to the cost.
This demonstrates a correlation between retention and the type of health plan an employee has. So if your workers are frustrated with the high costs of an HDHP, funding their HSA is a great way to show you still care about their financial, physical and mental well-being, while also helping reduce turnover.
2. Actively guide employees to high-value providers and care settings. For employees with high deductibles, healthcare is a minefield: one ill-informed choice can cost thousands of dollars, thanks to the complexity of navigating the cost and quality variation that exists in our healthcare system.
For instance, many people are surprised to learn that 70% of ER visits are avoidable and can cost them thousands of dollars, compared to only hundreds if they elected to go to an urgent care center instead. Or that imaging costs — from MRIs, ultrasounds and CT scans — are one of the leading sources of healthcare spend for most companies.
Now that cost shifting has put employees’ wallets directly on the line, the onus is on employers to help them make informed decisions about how they’re spending their dollars. This means offering employees the tools, resources and education needed to discover affordable care within their network.
3. Take a holistic view of financial wellness as it relates to healthcare. No matter what voluntary health benefits you provide in an effort to lessen the blow of cost shifting — like telemedicine, for example — you’re up against one common enemy: low engagement. Mercer’s 2018 National Survey revealed that 71% of companies offer a telemedicine benefit to help employees save time and money on basic care, but telemedicine only gets about 7% engagement on average.
In order to truly help employees save money on healthcare, you have to take a holistic view of financial wellness as it relates to healthcare and make sure you’re tying all of your strategies together into a cohesive ecosystem with a single access point for employees.
This sounds complicated but, in reality, it looks like this: Make sure your employees have a single destination to find affordable care no matter their needs, be it late night urgent care or a new primary care provider; understand how their health plan coverage factors in; and surface all of the amazing supplementary health benefits you may offer, like telemedicine. Just as how all seamless consumer experiences, from Amazon to Yelp, make their services accessible in one easy-to-use portal, your employee healthcare experience should do the same.
There are so many ongoing conversations about the rising cost of healthcare that it can be difficult to remember this isn’t just an economic, political or social problem — it’s a human one. Our employees are taking on second jobs, sacrificing their dreams of retirement and foregoing important medical care just to survive this ballooning cost-shifting crisis. Use these tips to demonstrate that you, as the employer, understand their struggles and will do what’s in your power to set them up for success.