Paying for health care is a burden in America, and employers – including medical practices -- need to look at alternatives to traditional health insurance
Paying for healthcare in America is expensive for employers. And increasingly, employees are carrying a bigger burden.
That’s because even the most robust, employer-sponsored health plans can have significant out-of-pocket costs for employees. Whether monthly premiums are subsidized or wholly paid for by employers, employees are typically on the hook for their copays, coinsurance, and deductibles. As a result, 38% of Americans said they or a loved one delayed care in 2022 because of cost concerns.
The solution? Employers must look beyond health insurance to new kinds of benefits that help employees afford and access care.
Health Payment Accounts (HPAs) are a new style of employer-sponsored benefit that hundreds of employers have implemented to help ensure their employees have access to the affordable, quality care they need. Here’s why they work.
The difficulty of paying for health care in America is partly because the costs are high, but also because they are usually unexpected. The stark financial reality is 57 percent of Americans, for example, can’t afford a $1,000 emergency expense – and the average annual deductible is now nearly $2,000 for individual coverage.
No one plans to get sick. Employees may have to pay large sums, possibly even their entire deductible, after a single unexpected medical event.
The most common ways of paying sudden and unexpected medical costs – health savings accounts (HSAs), credit cards, and financing available through the provider’s office – are limited. For example, patients can only contribute money to HSAs when enrolled in a High Deductible Health Plan (HDHP) and can only use their HSAs if they have enough saved to cover the expense. And health care financing is often reactive and carries high interest rates. That is, it’s an emergency response to an emergency situation that carries painful financial consequences.
Health payment accounts (HPAs), however, offer employees a small line of interest free credit they can use to pay for any unexpected costs upfront. They’re then able to set up a personalized repayment plan that works with their budget. With an HPA, an employee can pay a $200 bill and turn it into 20 payments of $10 with no interest or fees.
Concerns about costs can prevent employees from seeking out care while conditions are in the earliest, most treatable stages. And even patients who receive early diagnoses may decline the continuing care they need because they can’t afford it.
For example, if a patient visits their primary care physician for a routine physical and the doctor hears a potential arrhythmia during the exam, the doctor will order diagnostic blood work and an echocardiogram. While the preventative appointment was wholly covered by insurance, the diagnostic follow-up testing and appointments are likely not (and can be expensive).
What’s more: specialist appointments and any further care required after the initial appointment – often come with higher co-pays than a primary care visit. Bloodwork, imaging, outpatient procedures, and medication can all run up an employee’s (or their spouse or child’s) out-of-pocket charges.
As a result, patients often avoid appointments with the specialists they're referred to, delay scans, or fail to fill prescriptions.
The result is a vicious cycle that has important implications for their employer. Sick patients avoid the care they need because they can’t pay for it. Then they become sicker, which hampers their productivity at work and often leads to an adverse event (like a heart attack), which leads to an even more expensive hospitalization – or worse, death.
On a human level, the costs of this situation are compounding. It’s paramount for employers, payers, and providers alike to help ensure patients receive the right treatment at the right time.
Having an HPA in their pocket helps employees feel comfortable seeking the care they need, when they need it. The option to pay over time without interest or fees makes previously intimidating sums manageable.
Ironically, improving access to early treatment lowers costs for employer groups over time. These less expensive interventions also reward the group with healthier workers who are absent less often and are more productive at work.
For even the healthiest companies, 2023 is off to a stressful start. The worst of the pandemic may be behind us, but retention of frontline workers continues to challenge medical practices. One solution? Renewing your practice’s focus on employee satisfaction.
It’s not a difficult calculus: the healthier people are, the happier they are. So the more help employers can give employees to keep them healthy – say, by offering financial wellness benefits like HPAs – the more likely employees are to view their workplace positively, increasing the likelihood that they’ll stick around.
Beyond traditional health insurance, many medical practices are already aware of financing options such as deferred interest medical credit cards. Unfortunately, financing in the provider’s office doesn’t help those who are actively deciding to delay or forego needed care. At worst, they kick the financial can down the road, ultimately increasing patients’ out-of-pocket costs when they get hit with hidden fees.
Personal finances can have impacts on productivity, so taking even small steps toward helping employees lessen outside stressors can help folks feel more present and engaged with their work.
The solution? Benefits like HPAs empower a healthier, happier workforce – and ultimately result in better financial health for your business.
J.R. Clark is the SVP of health plan product and strategy with Paytient, a company which helps people access and afford care.