Out-of-pocket is out of reach for employees

For millions of Americans, healthcare isn't just a medical issue — it's a financial one. Even with insurance, out-of-pocket costs can feel insurmountable. Deductibles, co-pays, and prescription costs impact individuals and create ripple effects that impact employers, driving up absenteeism, reducing productivity and eroding employee satisfaction with their benefits.

Surprisingly, the most challenging healthcare expenses aren't catastrophic hospital bills; they're everyday medical costs, like routine visits and lab tests. While these expenses might seem manageable, 47% of Americans with medical debt owe less than $2,000, and two-thirds of medical debts stem from one-time or short-term expenses. Despite their size, these debts create barriers to care and financial stress that reverberate through households and workplaces.

Why do smaller healthcare costs create such big problems? Unlike other predictable expenses like gas or groceries, healthcare costs are largely unexpected and may need to be paid upfront. Patient responsibility is important in health plans to avoid overspending on premiums, but it leaves people unprepared for unforeseen costs. This leads to deferred care, financial hardship and worsening health outcomes, all negatively affecting employees. For benefits professionals, this is both a challenge and an opportunity. Rethinking how we approach healthcare affordability can help employees better manage out-of-pocket costs, leading to healthier, less stressed people who are more engaged at work.

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Why traditional cost-sharing falls short

For years, benefits professionals have focused on balancing coverage and cost. High-deductible health plans (HDHPs) have been popular but often create affordability challenges for pre-deductible care. According to a KFF poll, roughly 50% of American adults struggle to afford healthcare costs. Even a $500 medical bill can become a financial crisis for many. HSAs or FSAs often don't offer enough help when the time comes to pay for care.

This affordability gap creates costly downstream effects for employers:

• Deferred care leads to higher costs as untreated conditions worsen, leading to more expensive treatments down the line.
• Medical debt causes financial stress, distracts employees from work and causes absenteeism, so job changes are needed for better financial support.
• Underutilized benefits result in wasted investments, as employees can't afford to use their benefits.

To ensure access to care, improve employee health, and optimize benefits spending, employers must rethink how employees pay for care — not just how it is insured.

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Payment design: The key to unlocking affordability

Many employees live paycheck-to-paycheck and struggle to save for emergencies. Introducing flexible payment options could make healthcare expenses more manageable. Employers can remove financial barriers by offering employees the ability to pay predictable, affordable amounts without interest or fees, improving access and the overall employee experience.

One solution is the Health Payment Account (HPA), which allows for better management of out-of-pocket costs. A 2025 survey of HPA users found:

• Nearly 80% of employees who got care would have deferred some or all without an HPA.
• 71% said they were more likely to stay with their employer because of the HPA benefit.
• 34% would consider switching to a less expensive health plan, lowering employee and employer premiums.
  

Providers benefit as well, receiving full payment for their services instead of partial payments, and self-funded employers can negotiate better rates with local health systems when out-of-pocket expenses are fully covered. 

Bundling payment design with HDHPs

One powerful way to enhance affordability is by bundling flexible payment solutions with high-deductible health plans. HDHPs often require employees to pay large out-of-pocket costs before insurance coverage kicks in, making them hesitant to choose this plan during open enrollment. For those who do, fear of upfront costs may discourage them from seeking necessary care.

By adding an interest-free payment solution, benefit leaders can make HDHPs more attractive. Employees can opt for lower premiums without fearing unaffordable upfront costs, and they can save money in an HSA. Employers can redirect savings into other valuable benefits.

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Smarter spending, better care

The conversation around healthcare affordability has traditionally focused on coverage, price transparency, and cost-sharing. But true affordability is shaped by how and when payments are due. Employers, payers and brokers can improve affordability by changing how employees pay for care. Flexible payment solutions can eliminate financial roadblocks, ensuring out-of-pocket costs no longer prevent access to necessary care.

The solution isn't financial hardship; it's financial flexibility. It's time to stop punishing the unprepared and meet employees where they're at.