How deferred care is damaging your benefit strategy—and how to fix it

Health plan cost-sharing exists to discourage over-utilization, but after a decade of rising costs, higher deductibles have become a barrier to care for many families. A new study, commissioned by Paytient from Nonfiction Research Group, surveyed more than 1,500 workplace-insured Americans to examine the prevalence and consequences of deferred care amongst those covered by employer-sponsored health insurance. 

The findings revealed a stark reality: 40% of workplace-insured employees report deferring necessary medical care due to unaffordable costs. 

Importantly, the study challenges the traditional belief that those unable to afford healthcare are low-income or uninsured individuals. All of the study’s respondents had health insurance from work. The majority earned more than the average American, nearly one-fifth made more than $100,000 a year, and 46% of respondents held managerial positions or higher. 

The study goes on to tie deferred care to a host of negative health and productivity outcomes that should be concerning to employers and their benefit advisors. Of those who deferred care, 38% said their health got worse as a result. 1 in 6  respondents reported their work was affected due to a health issue they couldn’t afford to treat. Of this group, 69% were distracted by pain at work, 37% cried at work, 31% had a panic attack at work, and 29% hid in the bathroom. Others made the decision to leave their job with 17% reporting they have left their jobs to afford better health care. 

If the benefit program is designed to help the employer attract and retain talent and foster a productive environment where the organization can reach its goals, these findings signal that high deductibles may be working against those goals. Many employers have moved away from high deductible health plans (HDHPs) for this reason. However, new solutions are emerging that can preserve the cost advantages of higher deductibles while delivering a better employee experience around access to care–particularly mental health care.

Copay over time solutions like Health Payment Accounts (HPAs) or health plans with integrated cost-share smoothing features are growing in popularity. HPAs have been adopted by major employers including Hyatt, Advantage Solutions, and R.R. Donnelley. Copay smoothing solutions will also be paired alongside Individual and Family Marketplace plans in twenty states in 2025. And the concept is coming to Medicare in 2025. The Medicare Prescription Payment Plan, a provision of the Inflation Reduction Act, will allow seniors to spread the out of pocket cost of prescription drugs into a more affordable series of payments over the plan year. 

With applications in commercial insurance and now Medicare, copay smoothing solutions have several advantages. First, they empower the member to seek care without fear of having to pay unknown costs up front. This earlier, more proactive treatment logically leads to faster recovery, better managed chronic conditions, and lower costs over the long term. Second, these programs separate the timing of care from the timing of payments due so that families can seek care when needed and pay on a schedule that works for their budget. There are no interest or fees associated with copay smoothing solutions like the HPA or the Medicare Prescription Payment Plan. Importantly, these programs limit the impact on member’s savings, HSA accounts, and 401Ks, preserving their financial resilience while they seek care. 

Copay smoothing programs have interesting downstream effects that support the overall benefit strategy. 

Of those employees using an HPA: 

• 92% reported greater satisfaction with their benefits overall
• 64% reported being more likely to stay in their role
• 66% said they and their family are healthier
• 54% reported accessing care they would have otherwise skipped

Related: Benefits advisor’s guide to value-based primary care

Interestingly, employers who implement copay smoothing often see employees voluntarily migrating to higher deductible plans in healthy years to take advantage of lower premiums. The confidence they get from knowing they have a way to pay for any healthcare services they might need during the year makes all the difference in helping them get comfortable with lower cost, higher deductible coverage. 

In short, deferred care is a reality for a significant portion of employees with coverage in the benefit programs we design. Smart employers and their advisors are starting to think about ways to improve the experience of seeking care before the deductible is met, and copay smoothing solutions available in all sectors of insurance are becoming a standard of care that sits well alongside the health plan whether it’s group, ICHRA, individual, or Medicare coverage.