Improving health outcomes starts with improving financial resilience for employees

While many medical credit cards appear to offer relief by addressing upfront costs for the patient and provider, they often come with opaque terms and high interest rates that are only deferred for a select period. Once that period ends, all of the interest that’s been building during the term of the agreement will be applied to the principal, often at rates as high as 25%.

If an employee leveraging the card can’t pay the balance within the deferred period, they’re suddenly in a worse financial situation. This dynamic has resulted in patients paying over $1 billion dollars in deferred interest charges on medical credit cards in just a three-year period. That’s money that could have gone toward an emergency savings fund, retirement, or kids’ college fund.

Alternatively, more than 1 in 4 adults reported delaying or not getting some form of health care due to cost. Providers, who themselves struggle to collect for their services (less than half of what they are owed gets collected each year), are left with few choices but to share upfront costs with the patient requiring out of pocket payments before care even starts. This dynamic further degrades access and equity.

Those who are uninsured, or in poor health, and Black and Hispanic adults are also much more likely than others to delay or go without health care because of affordability. Care avoidance is not only a matter of access, but of equity, too. When people wait to access needed care, their conditions become worse, and they show up to an already strained system with conditions that are pricier to treat.

This unsustainable cycle negatively affects employees’ physical wellbeing and financial future. Traditional employer-sponsored benefits plans are no longer enough. A simpler and more equitable approach to consumer health care financing is needed.

The path to more equitable care and financial resilience

The emergence of interest-free health care financing solutions and a renewed emphasis from employers and consultants on improving employees’ financial resilience can have a profound impact on the health care system overall. Proactive health care financing improves health outcomes for employees and the employer’s bottom line.

Health equity is often framed as simply increasing access to care, but true equity requires more than just open doors – it demands supporting employees’ access to equitable financing to get them through the door; otherwise, we achieve equity in access but not in outcomes

If we can shift focus to removing required costs at the point-of-care paired with access to truly interest-free repayment tools, we can ease the financial burden that comes with proactively seeking care.

Results of a recent study on the impact of this type of solution found that employees with low credit scores averaged the same number of annual claims as employees with higher credit scores. This indicates that with access to financing, the kind that doesn’t include any hidden fees, predatory interest rates, or other ambiguous terms, empowers people to seek care when they need it. They can take charge of their health care and plan for a more financially resilient future.

Holistic financing and improved employer benefits

The ripple effects of this equalizing financial benefit are powerful. Employers now have better tools at their disposal to support a more holistic approach to improving health equity. Providing employees interest-free financing with flexible repayment plans available through their employers via benefits solutions providers.

These tools can be implemented outside of open enrollment periods and have almost no technology requirements. In fact, employers who layer interest-free financing into their benefits have seen medical trend increases that are 40% lower than national averages. Companies can improve the health and morale of their employees while saving money that can be reinvested into the business and overall employee wellbeing.

The result is healthier, more productive teams, higher retention, and increased satisfaction with their benefits program. This can be accomplished while removing administrative bloat and saving everyone money. A healthier future starts by addressing the financial needs of the present – employers and their advisors play a pivotal role in doing that.

David Kinsey is a 30-year veteran executive in the health care and employee benefits industries. In his current role as Vice President of Sales at PayMedix/TempoPay, he leads sales initiatives, focused on driving the growth and expansion of PayMedix/TempoPay’s innovative health care payments solutions that provides interest-free financing to all employees regardless their credit histories.

Prior to his current role, Kinsey was an Executive Director at Aetna where he led the Healthcare Business Solutions team to achieve 60% growth over five years by directing enterprise sales, retention, and membership growth strategy. Kinsey was awarded Aetna's Chairman's Leadership Award for his leadership and collaboration. Kinsey’s prior roles at Aetna included working with employer groups and consultants on innovative employee benefits strategies and plan administration. Prior to Aetna, he was a Senior Client Manager at Cigna Healthcare, where he was awarded the Gold Circle for top sales results. He earned his BBA in Finance from Stetson University.