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Lower-wage earners opt for higher-cost PPO. Really?

Low-wage employees are less likely to enroll in a high-deductible health plan (HDHP) than higher-wage employees, according to Benefitfocus’ State of Employee Benefits report. The risk of large, unexpected medical bills is a major concern.

Today companies are offering employees more choice in health care benefits. The two most popular options are a traditional PPO plan and a HDHP plan. With an HDHP, employees have a much lower premium than a PPO. However, they have to pay more out of pocket when health care services are used.

While some might expect employees earning a lower income to prefer the HDHP plan due to a lower premium, “it appears [they] are less willing to take on the high out-of-pocket risk of HDHPs than the higher-wage peers, who presumably have more room in their budget for unexpected medical costs.”

As the workforce continues to become increasingly diverse and consumer-driven, it’s important for employers to understand the needs of their employees—while also providing resources to help them manage their growing financial responsibilities. The changes expected to come with the repeal, replacement, or repair of Obamacare may also allow carriers and marketers to create low-cost alternatives to give lower-wage earners what they are looking for: help with first dollar expenses.

Ben Rozum

Founder | Start-up Entrepreneur | Company Culture Creator | Executive Leader

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