Since 2013, the average family healthcare premium has increased by 47 percent, reaching an average of $23,968 for family coverage each year. And if that weren’t enough to illustrate how expensive healthcare can be, 1 in 3 Americans cannot afford an unexpected $400 expense, and nearly 1 in 5 U.S. households are in medical debt.
These high costs of healthcare leave Americans–especially those who are lower-wage or minority workers–susceptible to worsening health conditions for fear of an unaffordable medical bill. As insurance premiums rise, healthcare costs disproportionately affect employees, especially those already financially strained. Between the steep costs of premiums, limited access to facilities, and additional out of pocket expenses for care, many workers are forced to decide between health and avoiding financial hardship.
These rising costs have made health benefits more important than ever for job seekers. Today, workers are twice as likely as they were pre-pandemic to consider health and wellness programs a “must-have” for a new role, and 73 percent of workers expressed they’d stay longer with an employer if offered access to increased health benefits.
How rising costs impact employers
Rising healthcare costs impact not only employees but also employers. In a recent survey, employers expect healthcare benefit spending to soar in 2025, increasing by 8 to 9 percent.
As an employer, you’ve likely struggled with balancing profitability and care for your employees as these costs increase, and you’re not alone. About half of small business owners have seen health insurance costs increase by 10 percent this year, pushing employers to make tough decisions – raise customer costs, participate in layoffs, and/or increase employee cost-share for their health insurance, e.g., through higher deductible and out-of-pocket maximums. Did you know that an average 1 percent increase in healthcare prices lowers an employer’s headcount by about 0.4 percent?
With all of this in mind, it’s imperative that employers recognize the barriers some more vulnerable employees may face when accessing healthcare. By providing more affordable healthcare benefits, employers can help mitigate the impacts of rising healthcare costs, promote overall well-being for employees and maintain a healthy, productive workforce.
What are some healthcare disadvantages?
In order to make a change, we need to fully understand the healthcare affordability challenge. Here are some of the ways the rising cost of healthcare is impacting your employees, particularly minorities and low-income earners:
Cost of Premiums
Healthcare premiums may cost the same for your employees month-to-month but differ in the impact on their annual salary. Healthcare premiums comprise a significantly higher percentage of annual earnings for lower-wage and minority workers.
The same premium cost accounts for more than 28.5 percent of earnings for workers in the 20th percentile, compared to 3.9 percent for employees in the 95th percentile. Differences in annual cost impact for Black and Hispanic families vs. White families is about 40 percent, too.
Access to care goes beyond premium cost, however. Insured workers who make less than $50,000 annually face significant access challenges.
Cost of care
Forty-three percent of workers making less than $50,000 a year also regularly skip care due to cost, and 32 percent struggle to afford routine healthcare bills. Only 16 percent saw a specialist in the last year. However, 66 percent noted that they would go to a primary care doctor more often if it were free.
How can employers solve the “affordability cliff”?
With these healthcare disadvantages, you’re probably wondering how to solve this “affordability cliff.”
While you may prioritize certain benefits you think employees are satisfied with, it’s important to note that employers tend to think employees are happier than they actually are. Regarding feelings of mental health, physical health, financial health and satisfaction with benefits, employers tend to overestimate positive feelings by an average of 20 percent.
As employees prioritize health and wellness programs, you must do the same to help retain them. The best way to do so is by investing in affordable healthcare plans that benefit the employees without jeopardizing profitability–offering plans with no deductibles to mitigate costs and free access to more care (including virtual primary care)–like Centivo.
Centivo offers a comprehensive healthcare approach that includes free primary and mental health care. This ensures that your most vulnerable employees can access the care they need without worrying about upfront costs since there are no deductibles. With copays for all other care, employees will know their costs before they seek treatment, offering financial clarity and peace of mind.
Centivo also offers a variety of virtual care options for increased access to care, including Centivo Care, an innovative virtual primary care practice. With these options, employees don’t need to take time off work or stress about childcare or transportation to receive the healthcare they need. This flexibility helps employees stay on top of their health without disrupting their day-to-day lives.
By opening the front door to accessible healthcare, Centivo produces sustainable improvements in your employees’ affordability, access, utilization and outcomes. On average, employers will save around 20 percent annually, while employees will save up to 71 percent in out-of-pocket costs. With Centivo, you can ensure all your employees have access to high-quality care without the financial barriers that often prevent them from seeking the help they need.
If you want to learn more about Centivo and how it can help you provide your employees with affordable healthcare, contact us here.