July 6, 2023
It is high time we talked about pressing issue that is impacting employees across the United States: medical debt. According to a recent survey by the Financial Health Network, a whopping 37% of employees are burdened with medical debt. The bad news does not end there — about 32% of them had trouble paying their medical bills last year.
The rising cost of health care in the United States is applying a significant strain on your people. They often face high deductibles and expensive treatments in a market that is complicated and difficult to navigate. Medical emergencies, chronic illnesses or extended hospital stays all have the possibility to push your people into a financial crisis.
Employers are in a unique position to help your employees improve their financial health and tackle medical debt. And guess what? Prioritizing employee financial wellness can boost your attraction and retention efforts in today’s cutthroat labor market. Win-win!
Why Are Workers Struggling with Medical Debt?
A 2020 study by the Journey of the American Medical Association revealed that 1 in 5 Americans has outstanding medical debt. Even more jaw-dropping—nearly 60% of those debts stem from a single illness or medical procedure, not recurring care. And recent trends do not paint a prettier picture —health care systems today are seeing an increase in late diagnoses as countless Americans delayed seeking treatment during the pandemic.
Average deductibles have more than doubled in the last decade. And brace yourselves again—over half of U.S. workers were enrolled in high deductible health plans as of 2020, a significant increase from 35% in 2015. As if that weren’t enough, health premiums are also climbing for many Americans. It’s a one-two punch to the wallet.
Despite having employer-sponsored health insurance, a staggering 26% of adults are considered underinsured and vulnerable to those pesky medical bills, according to the Financial Health Network. Underinsured workers are less likely to seek medical care or fill prescriptions, which can lead to more expensive healthcare down the road. Guess who bears the brunt of those costs? You guessed it—employers like you!
The Impact of Medical Debt on Employees
The consequences of rising healthcare costs and medical debt go beyond finances. They take a toll on workers’ physical and mental health, leading to a downward spiral. An annual survey by a financial wellness platform, Salary Finance, found that one-third of employees are skipping preventive checkups, follow-up care and scheduled procedures to dodge medical debt. This further exacerbates their medical challenges.
On top of that, medical debt brings a tidal wave of financial stress. This stress does not discriminate—it affects employees’ home and work life. Financially stressed workers are less productive, struggle to complete daily tasks, and have strained relationships with their co-workers.
How could we summarize the result of medical debt for your people? Broad sweeping negative impacts on whole-person health.
How Employers Can Help with Medical Debt
It may seem like a bleak landscape. But employers have the power to step in and make a real difference in their employees’ lives. Here is how:
Health care risk management:
Analyze your claims data and population to understand which employees are most at risk for large health claims and financial struggles. This will guide your efforts to improve their financial health and provide targeted support.
Strategic Employee Benefits:
When it comes to benefits, one size does not fit all. Customize your benefits offerings to allow for individual financial situations and healthcare needs. You can lend a helping hand by offering benefits and services that assist employees in managing their healthcare expenses. Evaluate your contribution strategy for health savings accounts (HSAs) and health reimbursement arrangements (HRAs) to alleviate their out-of-pocket burdens.
Guessing games do not work. Anonymous surveys can provide insights into what your people require and desire. Armed with this knowledge, you can take the right steps to meet those needs effectively.
Educate employees to be better healthcare consumers:
Knowledge is power. Help your employees become savvy healthcare consumers by providing education on benefits plans, explaining plan details and teaching them how to compare prices and review medical bills. Empowered employees make smarter medical decisions, saving both themselves and their employers money.
The Time to Help is Now
It is past time to tackle medical debt head-on. By offering benefits that align with your employees’ needs and finances you can make a world of difference. Prevent or reduce medical debt, keep your workforce healthy and productive and ensure they receive necessary treatment without drowning in financial woes.
Remember, you can be more than just an employer. You can be a real partner to your people. Helping them build a future free of financial stress.
Don’t know where to start? We would love to help. Feel free to reach out to us by clicking below.