The negative spiral of high-deductible plans

Health care is costly and the industry is always changing. Consistent evaluation of your health care program is necessary because what may have worked for employees in the past, may not be what works best now. This can be especially important when providing plans with large out-of-pocket expenses.

Employers need to be aware the moment employee’s begin to worry about affording health care. Whether one employee or the entire workforce share this concern, health care affordability is a challenge that needs to be addressed.

To evaluate your plan effectively, employers need to have conversations with employees and conduct regular surveys to see how the plan is impacting them. This feedback, paired with plan data from advisors, can help you better understand the affordability of your plan.

High-deductible plans are a popular choice among employers because they can offer employees an affordable premium. These plans also come with the added benefit, for employers, of meeting affordability requirements set by the ACA. Currently the affordability threshold is 9.6%, the maximum percentage an employee can contribute. If premiums are too high, employers may exceed the affordability requirement, which means the employer needs to contribute more to monthly premiums payments for their employees. Some businesses can struggle with this extra cost.

The beginning of an unfortunate spiral

Employees may also struggle. Low premium, high-deductible plans have deductibles that can reach a staggering $5,000-$6,000. While employees don’t have high monthly payments to make, high deductibles can keep them from getting appropriate care. According to a recent KFF (Kaiser Family Foundation) report, 44% of insured adults worry about how they will pay their medical bills in the event of an accident or illness. This means almost half of insured adults have concerns about seeking medical care. In these cases, health insurance is not doing its intended job. Although health insurance is available to employees on paper, the threat of medical debt, or worse, bankruptcy, can prevent members from using that insurance and getting health care. These employees can be considered functionally uninsured.

The spiral continues

About 40% of adults have postponed or skipped medical care as a result of high costs. While dental care is the leading service to be declined, some may avoid care for ongoing treatment or decline medically advised procedures such as X-rays and MRI scans. Prescription costs are also being avoided by employees, who may cut medication in half to extend usage. Some may skip medication entirely.

This can be catastrophic for an employee. When skipping medication or declining treatment may not have immediate repercussions, chronic conditions, such as diabetes, can worsen over time.

Read more: Income impacts how employees use HDHPs

Unfortunately, group members who do not seek treatment for health conditions, or those not taking required medication will inevitably drive the cost of the health insurance plan up. When costs increase in this way, more employees can begin to feel the effect of high costs, and they too may begin to avoid treatment. Creating a spiraling cycle.

Stop the spiral before it impacts your employees

If your organization offers a low premium, high-deductible health plan, options are available. Work with an advisor to help discuss strategies that can address your plans affordability for your people. Options such as health savings accounts and flexible spending accounts for employees can be implemented.

Don’t let your employees worry about medical debt and care affordability alone. Reach out to them regularly with one-on-one conversations about their health plan concerns and analyze important data from your plan throughout the year with your advisor.