Employees Are Increasingly On The Hook For Their Medical Costs

A Hospital Bill's High Fees Look Even Bigger When Unbundled : Shots - Health  News : NPRSource: Axios, by Caitlin Owens

The growth of high-deductible health plans led to people with employer-sponsored coverage paying for a larger share, on average, of their health care costs between 2013 and 2019, according to a new analysis by the Employee Benefit Research Institute.

Why it matters: A large portion are paying significantly more in terms of raw dollar amounts as well, with the biggest increases among the highest spenders — and that’s on top of premium increases. As costs rise, even many insured patients struggle to afford their care.

Yes, but: Out-of-pocket spending decreased during 2020, likely a byproduct of the way the pandemic disrupted the health care system and pandemic-era policies that may have lightened patients’ cost burden.

By the numbers: The share of their medical expenses paid by people enrolled in employer-sponsored coverage increased from 17.4 percent in 2013 to 19 percent in 2019, the analysis found. It declined to 16.2 percent in 2020.

  • * Enrollees spent a median $249 out-of-pocket in 2013, $287 in 2019 and $205 in 2020. This median includes people without any medical expenses. The average out-of-pocket costs rose from $737 in 2013 to $906 in 2019, falling to $811 in 2020.
  • * Enrollees in the 75th percentile saw their spending obligation increase from $826 in 2013 to $1,030 in 2019, and those in the 90th percentile saw an even larger increase, from $2,792 to $3,295.
  • * Out-of-pocket spending obligations varied significantly among patients with different underlying conditions.

Between the lines: Spending trends also varied based on the type of service.

  • * Before the pandemic, both the share of out-of-pocket spending and the absolute amount paid by patients increased most for outpatient services.
  • * The average amount spent out-of-pocket on prescription drugs actually decreased between 2013 and 2019, before seeing a slight increase in 2020.

Americans’ Financial Security Increasingly Tied to Employee Benefits

Nearly two in three workers strongly believe that employers have a responsibility to offer insurance and retirement benefits. In stark contrast, only 16% of employers strongly believe they are responsible for providing benefits. Yet, employers acknowledge that workplace benefits help employees and their families achieve financial security, according to a survey by Guardian.

Forty-two percent of employees get most or almost all of their insurance products through the workplace while 68% rely on their benefits for at least half of their financial preparedness. Even when employers offer these benefits, many workers do not take advantage because of poor decision-making, ineffective communication, or education efforts. Employers can improve enrollment and the perceived value of these benefits by increasing communication and transparency.

Workers who get a total compensation statement from their employer place a greater value on their benefits and consider their company’s benefits communications effective; 87% report feeling more confident in their own benefit decisions. Nearly three in four employees who get a total compensation statement say that seeing information about the monetary worth of their benefits caused them to place greater value on them. Unfortunately, just one-third of employers report providing their employees with a total compensation statement.

Employers increasingly prioritize financial wellness

Financial wellness is increasingly being integrated into overall wellness strategies, according to benefits experts. Three-quarters of employers responding to an Aon Hewitt survey indicated they had plans to expand financial programs beyond a focus on retirement. One-quarter said they were very likely and 36% indicated said they were somewhat likely to help employees with money management. BankRate.com (3/4)

Last Updated 08/10/2022

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