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Chances are your employees—at least some of them, and perhaps quite a few—are struggling with medical debt. Medical debt has long been a leading reason for bankruptcy latest data shows that 43% of Americans with industrial insurance through their employer have experienced medical debt, and a quarter say they currently have it.
As costs and deductibles increase, simply providing health care advantages is not going to be enough to protect employees’ physical and financial health and the company’s interests. Employers who help their employees avoid medical debt can prevent work distractions caused by a lot of these financial hardships, in addition to negative attitudes about company health advantages.
Here are two key ways employers can do every little thing they can to protect team members from medical debt and achieve higher health outcomes for their employees while increasing productivity and engagement.
Both employers and employees struggle with health care costs
Health care costs are typically the second largest expense for employers after wages, and they proceed to rise faster than anything otherwise. Nine out of 10 employers claim that health advantages as an expense is not going to be feasible by 2031. Some may argue that they are now not manageable.
Employers spent an average of $17,393 on family health advantages per worker in 2023 — a 48% increase since 2013. Rising costs have forced employers to chop health advantages, often shifting more of the burden to employees by offering less comprehensive coverage or increasing deductibles.
Because employees must meet a deductible before insurance kicks in for many sorts of care, higher deductibles increase the likelihood of medical debt. With deductibles of $10,000 or more in some cases, it’s clear that health plan advantages alone are not enough. AND A recent study Goodroot’s survey of Americans found that about half (52%) of staff with health care debt have greater than $2,500 in debt.
The study also found that greater than 90% of employees who experience medical debt skip at least some medical care to avoid costs. This disturbing pattern not only threatens an individual’s health and potentially results in costlier treatments down the road, but it also increases costs for employers who depend on healthy employees and aim to advertise preventive measures.
Many of your employees qualify for hospital financial assistance
Under the Affordable Care Act, nonprofit hospitals are required to supply patients free care at reduced rates based on income. The income threshold to qualify for these programs is often quite high—a family of 4 with an annual income of $120,000 qualifies in many areas, and in some places, people earning $180,000 still qualify for some relief.
These programs are an integral tool for stopping medical debt, but their effectiveness is hampered by a ignorance and a variety of misconceptions. A Goodroot study found that 53% of staff with household incomes under $100,000 do not know about hospital financial assistance, although they are most definitely to qualify for it.
Those who know about this often do not apply because the process can be burdensome. These programs are also known as “charity care”, which discourages some people who do not want to accept “charity” from applying. Fifteen percent of employees surveyed said they didn’t feel comfortable accepting “kindness or help.”
Employers have a responsibility to protect their employees by promoting awareness of hospital financial assistance and supporting their employees in applying for it. The fact is that this is not charity – it is a special rate that hospitals must offer to acquire tax-exempt status. It is also in the employer’s interest to assist employees avoid the stress and hardship of 5- or 6-figure hospital bills.
Taking advantage of health care services is now not as easy because it was once – employees need assistance
When most employers offered low-deductible or no-deductible plans (and the cost of care was more reasonable), it was easier for employees to grasp and use advantages without incurring large bills. Today, in the age of high-deductible health plans (HDHPs) and minimum essential coverage (MEC) plans, combined with complex industry jargon, skills are required to grasp the advantages and leverage them in a way that can result in the best health and financial outcomes.
When you are looking for a latest supplier, determining whether or not they’re in-network or out-of-network takes a lot of effort, and the answer can have an impact on how much an worker owes. Likewise, knowing when cheaper generic drugs are available or when prescription drug prices are lower than what insurance pays can have a serious impact on an worker’s wallet. The comparator is crucial when planning a diagnostic test similar to an MRI. Prices vary greatly depending on where you scan, so employees can save lots of of dollars by asking and getting prices up front. But where to search out this information?
Once you receive care, it is vital to review your bills fastidiously. The complexity of health care billing means most of the bills contain errors. Once the exact cost is determined, there is often room for negotiation.
All of this, after all, takes time and effort, often during working hours, which is why an increasing variety of employers offer navigation services in addition to health advantages. These services involve obtaining prices upfront and negotiating on behalf of employees. Care navigation is an effective cost-containment tool for self-funded employers who pay staff’ compensation, but it can also help fully insured employers save by minimizing worker distractions throughout the workday while navigating the health care system on their own.
In an ideal world, navigators and health aides can be unnecessary, but the costs and complexity of America’s health care system are far from ideal. Employers who accept this and do every little thing they can to protect their team members from avoidable debt will profit from a healthier, happier and more productive workforce.