Health insurance is becoming increasingly unaffordable for most Americans and it’s leading to worse health outcomes in a variety of ways.

In response, Centivo, a leading national TPA (Third Party Administrator), released a survey in late 2021 highlighting financial and health-related issues around unexpected medical expenses for Americans.

We recognize that Americans face many issues in affording healthcare and health insurance expenses. This survey supported that perspective and most employers should take away three key findings when it comes to their next renewal and plan design discussion.

Cost-Sharing is Making Healthcare Unaffordable

First, healthcare is increasingly unaffordable for Americans and cost-sharing features such as high deductibles are contributing to this issue.

Consider this:

• Two in five (40 percent) of those with deductibles between $1,000 and $4,000 don’t have enough savings to meet a major medical expense
• 43 percent of those with a deductible over $4,000 have less than $4,000 in savings; and,
• 25 percent of those at the lowest deductible level can’t cover a major medical expense with existing savings

And in nearly every aspect of medical care, people with the highest deductibles have skipped or delayed care due to affordability concerns at higher rates than people with lower deductibles.

• 48 percent of those with deductibles over $4,000 skipped a specialist visit versus 25 percent of those with a deductible under $1,000
• 25 percent of those with the highest deductibles skipped a needed mental health counseling session versus 16 percent with those under $1,000
• 23 percent of those with the highest deductibles altered a medication schedule versus 10 percent of those with the lowest

This shows up as well in filling prescriptions, PCP visits, visiting the ER, completing prescribed labs and tests, and purchasing needed medical equipment.

Nearly three in five insured respondents made financial sacrifices when confronted with a significant medical expense. Respondents

Medical Expenses and Mental Health

Second, medical expenses are a leading cause of mental health and well-being concerns for Americans.

More than one-quarter of those with significant medical expenses said it had a major impact on their mental health. And 16 percent said the medical expenses had a major impact on their family’s well-being.

We can see a connection when we compare data from Springbuk on how telemental (I’m still not on board with that term – virtual mental health care) utilization has been elevated and stable throughout the last two years. Medical expenses create emotional stress for individuals and their families, leading to an increased demand for mental health services.

Trade-Offs for Lower Healthcare Prices

Finally, Americans are in fact willing to make trade-offs if they were to realize significant savings in their healthcare spending.

73 percent of respondents to the Centivo survey said they were willing to trade off or go without features in their health plan if their coverage were to cost 10 to 30 percent less than their current plan.

In other words, employees are ok with losing plan features if there are savings to be had.

What kinds of plan features are they willing to trade-off?

• Not being able to go to any pharmacy (50%)
• Requiring referrals for specialist visits (50%)
• Traveling further to see providers (42%)
• Losing their current PCP (30%)
• Not having a large provider network (21%)

However, 27 percent of respondents said they were not willing to forego any of the above features.

Plan sponsors should design plan offerings that meet both pools of employees – the majority are looking for price relief and will forego certain features, while a significant minority of employees aren’t willing to lose plan features. Here are three great questions for plan sponsors to ask themselves ahead of their next renewal:

1. How can we make our health plan more affordable to use?
2. How is our health plan contributing to the mental health needs of our employees?
3. Should we ask ourselves whether our employees would forego plan features for meaningful savings?

Click here for a complimentary discussion with a benefits consultant if you’d like to explore any of these questions or statistics!

Posted by John Hansbrough in Behavioral Health, Healthcare Spending, Research