Workers enrolled in HDHP need help with first dollar coverage
Why employers offer HDHP plans
The majority of large employers believe HDHPs are one of the most effective ways to reduce costs, according to the National Business Group on Health. Studies show that higher deductibles lead to a lower benefit spend because there is less care across the board. This helps companies offset rising healthcare costs.
The size of the average employee-sponsored plan deductible has more than doubled over the past eight years. According to a survey by professional services consulting firm PwC, a quarter of all companies that offer health insurance only provide workers with high deductible plan options. In the next three years, this number will increase to almost 40%.
Reasons to rethink HDHPs
While HDHP plans help companies’ bottom lines, some suggest there are reasons employers might want to rethink HDHPs.
For instance, several studies show that workers enrolled in HDHP decline to take necessary (and unnecessary) care. Nearly 30% of employees and dependents with deductibles higher than $1,500 for individual coverage avoided medical care because they couldn’t afford the out-of-pocket costs.
Avoiding care can result in costly health complications, emergency room visits, hospitalizations, disability, and absenteeism further down the road. The result is increasing overall healthcare costs to both employers and employees
Furthermore, there is a concerning trend of increased employee loans against 401(k)s. One of the primary reasons for the loans is to help pay for out-of-pocket medical costs. HDHPs are causing additional stress and impacting the overall well-being of employees.
Ways to help employees with high deductibles
It’s becoming more evident that employees need help with first dollar coverage. Employers are starting to adopt innovative benefit solutions to try and help solve the problem.
Gap plans can help reduce employer premium expenses while offering employees help with first dollar expenses. Other packages of indemnity insurance benefits—like accident medical, in-hospital cash, and critical illness insurance—can provide similar results in a program that is less comprehensive, but potentially less complicated.
In addition to driving down costs, employers are also driven by the hope of improving quality of care. Surgical case programs, like those mentioned in this article, and wellness programs are just a few of the other strategies employers are embracing.
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