Benefits

Rub Some Dirt on It: Why Workers Are Forgoing Treatments

By Rita Pyrillis

Jul. 26, 2015

Overall health care spending for employers and employees has slowed dramatically in recent years, but the number of employees struggling to cover their health care costs is growing, according to several recent studies.
 
That spike is forcing many to skimp on needed care as deductibles, copayments and coinsurance continue to climb, studies indicate. 
 
“If deductibles continue to rise and trends continue in income growth, we will surely see an increase in the number of people who are underinsured,” said Sara Collins, an economist with the Commonwealth Fund, a private nonpartisan foundation that studies health care. “What’s concerning is the large number of people who are telling us that they aren’t getting care because of the cost.” 
 
With the so-called “Cadillac” tax on pricy health plans looming in 2018, employers are asking workers to take on more responsibility for managing their health care, from choosing the right coverage and providers to paying more out of their own pockets.  
 
But too much cost shifting increases the chances that employees will delay or forgo care, according to Meghan O’Toole, a researcher at the Center for American Progress, who co-authored a 2015 study of how the practice affects middle-class workers. The Washington, D.C.–based organization is a liberal public policy think tank.
 
“Cost shifting has contributed to the slowdown in health care costs, but employees and employers are not benefiting equally,” she said. “People are delaying and even avoiding care because of the high costs.”
 
Among those who don’t have enough insurance to pay their medical bills, 59 percent are covered through their employer, according to a March report by the Commonwealth Fund that surveyed 6,000 randomly selected adults. The foundation defines underinsurance as out-of-pocket costs that add up to 10 percent or more of household income or a deductible that amounts to 5 percent of income or higher. 
 
Part of the problem is that deductibles are growing faster than many families’ income. The number of insured adults with high deductibles has tripled, the study found, rising to 11 percent in 2014 from 3 percent in 2003. And half of underinsured adults said they have trouble paying their medical bills with 41 percent reporting debt loads of $4,000 or more.
 
“We asked participants if deductibles and copays have prevented them from getting preventive care services and, surprisingly, a large number said yes, even though people in a high deductible health plan have these services fully covered,” said Collins, who co-authored the study. “Higher deductibles are leading people to make decisions about care that isn’t in their best interests.” 
 
And that concerns employers, said Brian Marcotte, president and CEO of the National Business Group on Health.
 
“Companies recognize that high deductibles are a challenge,” he said. “Employers want to partner with employees and trying to balance the desire for cost-conscious consumers with affordability, and therein lies the challenge.” 
 
As more employees offer high-deductible health plans — many as their only plan option — they are looking for ways to help alleviate employees’ financial burden by contributing to health care savings accounts, giving breaks on insurance premiums to reward participation in wellness programs, and offering cash and gift cards, among other approaches, according to a 2015 survey by Fidelity Investments and the National Business Group on Health.
 
“Moving to an HDHP as a company’s only offering works well only if employees can afford to cover the care they seek,” said Mike Thompson, a New York-based principal at PricewaterhouseCoopers. “Employers that have a low-paid workforce are concerned about their employees’ ability to get the care they need.”
 
In addition to incentives and contributions to health savings accounts, there are other ways to help workers manage their costs, like making sure that medications for chronic conditions like high blood pressure and diabetes are included among the preventive care drugs that are offered at no cost to employees under the Affordable Care Act. 
 
Employers could also adjust an employee’s out-of-pocket costs depending on salary, for example, offering lower deductibles for those earning lower wages, he said. Many companies are doing this, especially those that have a workforce with a wide range of income, Thompson said.
 
“Employers are looking for alternative ways to manage costs without cost shifting to employees,” he said. 
 
According to Sandra Kuhn, a principal at Mercer, employers must show employees how to take advantage of the cost-saving features of their high-deductible health plan, including the preventive-care services available at no cost to them. They also need to emphasize voluntary benefits, such as critical illness insurance, that can fill any coverage gaps.  
 
“There are a lot of little nuances in how employers can help employees manage health care costs,” she said.
Rita Pyrillis is a writer based in the Chicago area.

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