On Oct. 13, The Associated Press and the NORC Center for Public Affairs Research released a new poll which is captivatingly clear to me. The average working American is part of a financially fragile workforce and needs assistance with paying for their health plans copays and deductibles.

According to the research, 1 in 4 adults with health insurance say they "doubt" they could pay for a major unexpected illness or injury. The survey also found the biggest financial worries among people with so-called high-deductible plans that require patients to pay a big chunk of their medical bills each year before insurance kicks in.

The research also revealed that many people have reacted with choices that may not be in their best interest long term:

  • 19% of all privately insured adults said they did not go to the doctor when they were sick or injured, because of costs. Among those with high-deductible plans, the figure was 29%.
  • 17% skipped a recommended test or treatment; it was 23% among those with high-deductible plans.
  • 18% of all adults went without a physical exam or other preventive care, 24 percent among those with high-deductible plans.

The financial stability of these individuals is causing behavior that is potentially hazardous at worst and unfortunate at best.  
Many consumers report they made financial trade-offs to pay medical bills:

  • Overall, 33% said they cut back on entertainment; it was 43% among those with high-deductible plans.
  • 18% said they used up all or most of their savings, 24% among those with high-deductible plans.
  • 19% said they dialed down their contributions for retirement savings, 28% for people with high-deductible plans.

According to the article, one government definition sets the threshold for a high-deductible plan at $1,300 for individual coverage, but actually annual deductibles of $2,000 and even much higher are typical and the number of high deductible plans being offered by employers is growing.
This report and research unmistakably points to why we are seeing significant growth in voluntary benefit coverages such as supplemental accident, critical illness, gap plans and hospital indemnity. For those firms not currently offering these plans, it may be too late to provide your clients with these coverages this year; however, these solutions should be on your strategic planning horizon for 2015. The need for these coverages will more than likely increase as the average American continues to struggle with finding ways to pay for their high deductibles and copays in the new era of the Affordable Care Act. 

William “Tinker” Kelly is president of Voluntary Employee Benefits Advisors and an EBA Advisory Board member. Reach him at tkelly@veba1.com.

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