With COVID Causing Financial Strife, Americans Taking a Hard Look at Health Care Spending

brianoconnell

The hits just keep on coming for Americans struggling to keep up financially during a COVID-fueled economic downturn.

That’s the key takeaway from the annual 2020 Aflac WorkForces Report, which takes a magnifying glass to how employees and employers expect to approach health care benefits enrollment each year.

It’s not uncommon for Americans to adjust their health care benefits preferences, but the rising tide Aflac is seeing this year on other personal health care front is surprising.

This from the study:

--- Nearly half of Americans (49%) said COVID-19 was a wake-up call to invest more time researching and selecting their health benefits. That’s because 67% of employees have experienced at least a minor financial impact due to the pandemic, including canceling trips (42%), loss of income (36%), or paying for a family member’s care (21%).

--- The effect of COVID-19 represents a significant shift in employee habits, considering 92% of employees choose the same benefits each year. Typically, Americans spend an average of just 33 minutes on benefits enrollment.

--- More than half of employees surveyed (54%) said they experience anxiety about health care costs that may not be covered by their health insurance, showing the importance of comprehensive coverage. And 61% of Americans believe their share of medical costs will increase in the coming year, as the costs of health care continue to rise.

--- Roughly half of Americans (48%) couldn’t pay $1,000 or more for out-of-pocket expenses without relying on debt or credit if an unexpected serious illness or accident, such as COVID-19, occurred today. And 46% of workers said they have delayed medical care because of cost concerns.

The Aflac findings represent a significant shift in employee behavior considering, as noted above, a vast majority of employees (92%) choose the same benefits year after year. They also (on average) spend 33 minutes on the task – statistics that haven’t changed meaningfully over the years of the survey.

However, in light of current events related to COVID-19, about half of employees said the pandemic was a wake-up call to invest more time researching and selecting the best coverage options for them and their families.

“Choosing benefits is one of the most important actions people take each year. And for the past 10 years, our survey found that employees are on autopilot when it comes to the choices they make,” says Matthew Owenby, chief human resources officer at Aflac. “However, COVID-19 has inspired important conversations taking place about the current health care crisis and growing concerns about financial security.”

The report notes that one-third (33%) of employees either don't feel confident or are unsure if their health benefits will protect them or their family in the event they are affected by COVID-19. 

As noted earlier, most employees’ wallets have already been hit by COVID-19. 67% of survey respondents agree they experienced at least a minor financial impact due to the pandemic, and a full third of workers say they experienced moderate to major impacts on their finances.

The most common of these financial impacts include:

--- Loss of funds due to canceled trips or events (42%).

--- Loss of a job or income (36%).

--- Unexpected costs related to caring for a family member (21%), deductibles (18%), and out-of-pocket health care costs (18%).

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For employers, these pandemic-related challenges will come to the forefront during open enrollment, as employees expect more from their benefits packages. 

A full 63% expect at least one expanded benefit, such as supplemental insurance or telemedicine, and 45% expressed great interest in insurance that helps offset financial costs related to COVID-19 or other pandemics.

"It’s certainly an encouraging sign to see more than half of workers are expecting more from their benefits package than just health insurance, and employers would do well to listen to their concerns,” said Owenby. “Our survey found that more than one-third (35%) of workers say improving their benefits package is the one thing their employer could do to keep them in their jobs – second only to increasing their pay."

"The one thing that human resources professionals should take from this information is that satisfying employees of the future will require sustained effort by employers to offer a variety of options that meet employee demand," he adds.

Check out the report here https://www.aflac.com/business/resources/aflac-workforces-report/default.aspx. For anyone vexed over household healthcare spending and benefits in 2020, it’s a great read.