Hint: It’s not all about the prospective savings
Choosing between different health plan options is too hard. There are so many different pieces to consider—premiums and deductible, copays and coinsurance, HSAs and FSAs, the list goes on. It’s no wonder then that most people would rather avoid the decision, with 90 percent rolling over their health plan every year, even though it costs them money. One study found that 80% of employees ended up in overly expensive plans. In another, rolling over their plan options cost employees over $2,000 on average annually.
In other words, confusion when choosing a health plan is costly.
It’s also avoidable. Decision support companies like MyHealthMath help employees choose the health plan that matches their specific health needs. We do the math for people, and we make it easy for them to understand the numbers. Employees who follow our guidance save over $1,900 a year on average.
Those savings are AMAZING. But they aren’t the full story. In fact, prospective savings is only one small part of a larger narrative about how decision support can drive meaningful change in people’s lives. Here are some other factors to consider:
Health plan decision support can change how people interact with the health care system
The health care system is overwhelming. A national survey found that people across the political spectrum agree that change is needed. People are confused about navigating the system, from picking their provider to accessing care to managing costs.
Choosing health insurance sets the stage for people’s interactions with the health care system in the coming year. When people don’t understand their plan choice, it’s all too likely that they’ll have unwelcome surprised costs that alter their whole health care experience.
Or, worse, they’ll avoid care entirely. People who don’t understand how to choose a plan and use it to support their care are more likely to avoid both preventive and non-preventive care because of costs.
Effective decision support does more than show employees the most cost-effective plan. It also helps them understand why that plan is more affordable and how their coverage works. Education on the benefits of tax-free accounts, defining confusing insurance terms, and teaching people about preventive care that’s covered at no cost—all of this makes it easier for people to get a comprehensive view of their options, so they can choose the right plan and get the care they need at a price they can afford.
It leads to better financial management
High deductible health plans come with lower monthly premiums and a health savings account (HSA)—a powerful savings vehicle. HSAs let you set aside tax-free funds for medical expenses, so that you can more easily cover out-of-pocket costs. Often, employers will match some amount of employees’ HSA contributions, so account balances can add up quickly.
Along with supporting near-term health needs, HSAs also positively affect long-term financial stability. Since unspent HSA money can be rolled over every year and continues to grow tax-free, you can use your HSA to save for medical expenses in retirement. You can also invest HSA money, so it grows even quicker.
However, HSAs are often underutilized. One analysis found that more than half of those who have an HSA haven’t contributed to it in more than a year. In the same study, a third of people who qualified for an HSA had not opened one. Others bypass high deductible plans entirely because they don’t understand the benefits.
Decision support can help people better understand how to make HSA-eligible plans work for them. For example, many people see the high deductible and opt-in for a seemingly safer plan with higher premiums. But if they were to invest the money that they’ll save on premiums into an HSA, they may pay significantly less overall and have a safety net for unexpected medical expenses. Doing this math for people can help them better understand their benefits, so they can take advantage of these powerful savings vehicles.
Health plan decision support can promote diversity, equity, and inclusion
Not everyone has a fair opportunity to benefit from the health insurance their employers offer. Studies show that language, race, ethnicity, and education level all affect people’s ability to choose and understand their health insurance. Decision support can help employers give everyone personalized education and support that fits their needs. This way, everyone can understand their health plan options and choose the right plan for them.
In other words, it can help employers create an environment where everyone’s health is valued—and this is essential for building a more inclusive workplace.