Does Your Health Plan Leave Your Workers Functionally Uninsured?

By Ashok Subramanian

That’s the overriding question facing U.S. employers. The Centivo Healthcare and Financial Sacrifices Survey, 2021, investigated the impact of and issues surrounding health care affordability among 805 U.S. adults with employer-based private health insurance, and three clear trends emerged:

• A significant and worrying number of workers are forced to make hard choices and sacrifices with regard to their health care.
• Concerns over health care costs are driving employees’ need for greater access to mental and behavioral health services.
• Counter to conventional wisdom, employees are willing to give up benefit plan features that were once considered untouchable if they can expect significantly lower costs in return.

Eye-opening, to say the least. Fortunately, each point is actionable.

Houston, we have an affordability crisis

If the health care affordability crisis for U.S. workers were a whodunit, the villain would likely be high deductible health plans (HDHPs). Such plans do work well for employees above a certain income level with the means to sock away funds in a health savings account (HSA). Unfortunately, one-third of Americans say they can’t afford to contribute to an HSA. This means HDHPs are problematic for a huge swath of American workers. To give you a sense of scale, 90% of our survey respondents reported having at least some level of deductible, and 20% said their deductible was $4,000 or more.

Consider whether this sounds like functional insurance:

• One-quarter of respondents did not have enough savings to cover a $1,000 deductible; 43% with a deductible at the $4,000-level or higher did not have enough saved.
• Given this lack of savings, 59% of respondents who had incurred a significant medical expense had to make a financial sacrifice to pay off their debt.
• Unfortunately, 60% of those respondents took on credit card debt, while 37% depleted their savings (see Figure 1).
• Those with significant medical expenses also cut back on necessities like groceries (51%) and utilities (22%).
• And this financial hardship correlates with poor health care behavior. Despite having insurance coverage, one in three people avoid important care due to cost. Some 35% have skipped or delayed specialist visits, and 32% have skipped or delayed visits to their primary care physician (PCP). The problem gets worse for those of lower socioeconomic status.

Surely this is not the intent of employers who offer HDHPs.

(Figure 1)

Strain on mental health

And the stress of this affordability crisis is having an impact on the mental health of workers.

Employee stress predates Covid-19, but the pandemic has revealed an immense need in the workplace for behavioral health services.

To meet demand, employers are rightly and rapidly expanding access to mental health services.

Ironically for many employees, health care costs are contributing to the very concerns that drive them to need mental health services:

• 27% of survey respondents who incurred significant medical expenses said those expenses had a major impact on their mental health.
• 16% indicated those expenses and worries had a major impact on their family’s well-being.
• 20% said they skipped or delayed needed mental health care or counseling due to cost concerns.

Clearly, there is a need to take a closer look at core health plans, particularly HDHPs, and not just add mental health point solutions.

Trade options for lower costs

Too often, employers believe their employees would never give up certain plan elements to achieve greater affordability.

Our survey results suggest otherwise. Employees are ready to trade plan richness for cost savings.

In fact, 73% say they would trade or forgo a plan feature for a saving of up to 30%—such as by selecting a primary care provider from a list (47%), obtaining referrals for specialist visits (50%), or limiting pharmacy choice (50%). And about 30% would give up the PCP or specialists they see.

These findings strongly suggest that a large segment of employees would readily accept a plan with a more limited care network and stricter referral rules in exchange for significant savings.

Three steps toward more affordable coverage

The good news is that viable alternatives in the marketplace provide a logical path to better outcomes for employers, employees, and providers. Here are three steps to take:

1. Pivot from HDHPs with very high deductibles. Demand that insurers and third-party administrators offer solutions that move away from simply adding higher and higher deductibles, given the damage they wreak.
2. Offer plans that encourage high-value care. Consider networks anchored by high-value providers, offer free primary care via a selected primary care team, and implement a plan designed around value-based care.
3. Nurture the behavior these changes foster. With coverage they aren’t afraid to use, more employees will maintain their health—both mental and physical. This means more people will access primary care and all its well-documented benefits, make more appropriate use of specialists, and better maintain medication compliance.

The biggest change? Healthier employees and families who view their health plan as a functional, true benefit that is improving their quality of life.

To learn how Centivo can help you create a plan your employees can afford to use, contact us today.

Ashok Subramanian is CEO of Centivo.