Health Care Cost Paradox: Employees are More Financially Fit, But Less Emotionally Prepared
Posted on Tuesday, March 9, 2021 by Sherri Bockhorst
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Since 2018, employees have been increasingly successful in creating a rainy-day fund that will cover a large, unexpected medical expense.
However, a new Businessolver report shows fewer are now comfortable with the prospect of parting with their hard-earned savings cushion to do so.
The silver lining of employees’ greater financial preparedness—despite the economic hardships that dominated much of the national conversation in 2020—is among the top-line findings of our third annual MyChoice® Recommendation Engine Benefits Insights Report.
When making benefits choices within Benefitsolver®, employees can opt to use the MyChoice Recommendation Engine. Based on their responses to a set of specially designed questions, users get a set of personalized benefit plan recommendations.
When we look at these responses in aggregate, an overall picture emerges of employees’ state of mind when they choose their benefits.
One theme that emerges is the difference between how much employees are saving and how they feel about it.
Let’s first look at people’s financial preparedness. Here’s how employees responded to, “Would your rainy-day fund cover a large ER bill?”
Since enrolling for their 2019 benefits, an increasing number of employees indicate they have resources on hand for a large out-of-pocket healthcare bill, while fewer report they would face a significant shortfall.
It might be tempting to attribute these shifts in people’s saving habits to overall belt-tightening in response to COVID-19. However, healthcare savings for the workforce as a whole have been ticking up since 2018.
While disparities persist in employees’ income, saving level and financial preparedness (and we discuss those further in the report), it’s important to note that even as employees overall feel more prepared for the financial impact of a large healthcare bill, they are also increasingly hesitant about actually spending the money.
This is how employees answered, “How do you feel about facing a large ER bill?”