In a recent report from the Financial Health Network looking at the impact of medical debt, we explored aspects of this very question. While most employers seek affordable health insurance options for their employees, health insurance does not always provide employees with adequate protection against medical debt and its devastating effects. The reasons for this are fairly straightforward:

Medical debt is pervasive and unplanned: Medical debt is the nation's most common form of debt, impacting more than 1 in 5 adults, and it is the leading cause of bankruptcy in the United States. Unlike many other forms of debt, medical bills are often unexpected.

Health insurance costs outpace wage growth: Employee deductibles and premium contributions are rising faster than earnings. In 2010, approximately 6% of individuals with employer-sponsored health insurance saw their deductibles account for 5% or more of their total income. A decade later, in 2020, that number more than doubled with 14% of individuals covered by employer plans now facing deductibles that consume a substantial portion of their income (5% or more).

More than 1 in 4 individuals with employer insurance are underinsured: 26% of adults with employer-sponsored coverage are now considered underinsured due to rising deductibles and other out-of-pocket health care costs. The impact of being underinsured is more than just financial, it creates incentives to avoid care in the short term resulting in more costly care down the road. About a quarter of underinsured adults do not visit a doctor when they have a medical issue, they skip recommended testing or treatment, and do not fill necessary prescriptions. For these reasons, nearly 40% of US adults worry about being able to afford needed care in the next year.

Affordable health care + financial health

Almost every employer (93%) share that their top priority is making health care affordable, while controlling costs for their organization. While this may seem like diametrically opposed goals, there are some emerging best practices that can help employers meet this goal while also advancing the financial and overall health of their workforce.

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Is your health plan damaging your workers' financial health & undermining your wellness efforts?

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