5 ways to build an accessible, affordable health plan

Are deductibles and coinsurance keeping employees from accessing healthcare?

April 17, 2023 3:05 PM

Both employers and employees in the U.S. know that health insurance doesn't necessarily make care affordable. As healthcare prices continue to rise, benefit leaders may have to rethink their health plans and break from the status quo.

The Survey of Income and Program Participation estimates that Americans collectively owe at least $195 billion in medical debt, despite over 90% of the U.S. population having health insurance. In other words, accessing life-saving care can ruin one's finances, and avoiding care can ruin one's health. That means the average health plan places workers in a precarious position, says Dr. Eric Bricker, medical director of insurance company SimplePay Health.

"A lot of companies are still giving employees health plans that are not actually affordable for the employee," says Dr. Bricker. "An employer's deductible could be $2,500 and the employees are paid $15, $18 or even $25 an hour."

Dr. Bricker argues that if most workers in a company do not make enough to comfortably meet their deductibles, then that health plan isn't truly a benefit. Moreover, that health plan is a prime example of inequity and exclusivity, two challenges most companies have voiced a commitment to overcoming.

"The existing health insurance plan for the majority of employers today is contrary to the 'E' in DEI," says Dr. Bricker. "For an employer to take steps to correct that, it shows employees the company's true commitment to DEI, in not just words but action."

Not to mention, a lack of access to healthcare equates to employees developing more severe, chronic conditions, which drives overall health plan costs for employers and increases absenteeism and presenteeism.

Dr. Bricker encourages employers to speak with their benefits brokers, vendors and advisers and reshape their health plans. He is confident with the right guidance employers can build a health plan that works for all, and it starts with these five steps.

Eliminate the deductible

In order for the insurance company to begin covering healthcare costs, employees have to first meet their deductible. According to the Kaiser Family Foundation, the average deductible for employer-provided coverage was $1,763 in 2022, but deductibles can be as high as $5,000. And while screenings, immunizations and other preventive services are usually covered without an employee meeting their deductible, a vast majority of care isn't — and that can be detrimental to anyone who has to receive treatment for chronic medical diseases, explains Dr. Bricker.

"If an employee wants to treat something like their diabetes or cardiovascular disease while the problem is still small, they have to worry about a deductible before their insurance even kicks in," he says. "Because that cost has to be borne by the employee, they don't seek care. They can't afford it."

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Dr. Bricker advises employers, whether they are self-funded or partnered with an insurer, to eliminate the deductible entirely. While employers would have to absorb the cost, Dr. Bricker believes they will see saved costs over time since employees will be far less likely to delay care. Ultimately, employees are more likely to seek care and maintain their health if they do not feel threatened by a large, looming number that stands between them.

Eliminate coinsurance

Coinsurance is the percentage of costs the employee pays for care, even after they paid their deductible. For example, an employee may have to cover 20% of each service, while the insurer covers the remaining 80%. Dr. Bricker points out that deductibles and coinsurance make it difficult for employees to know what is coming out of their own pockets versus what the insurance will take responsibility for. And the money they owe can add up quickly.

"Let's say you have a $1,000 deductible and 20% coinsurance, and you end up needing an MRI scan that costs $2,000," says Dr. Bricker. "By the time you're all said and done, you have paid $1,200 and your health insurance has only paid $800 for that $2,000 MRI."

Dr. Bricker asks employers to cut out coinsurance, and instead turn to co-pays.

Provide fixed co-pays

A co-pay is the fixed amount of money an employee contributes for a medical service. For example, a doctor's office visit may come with a co-pay of $15, while an MRI will cost $150. Dr. Bricker notes that co-pays give employees a clearer idea of what they pay for receiving care, so even if the service is costly, they can plan ahead. And without deductibles and co-insurance, there are fewer barriers in the way of insurers actually covering the costs of care.

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"The price certainty that co-pays give you is infinitely superior to what happens with coinsurance and deductibles," says Dr. Bricker. "Then you can actually tell the health plan member in advance what their out-of-pocket cost is going to be."

Pay off the co-pay like a credit card bill

Dr. Bricker also suggests that employers move away from the payment-at-time-of-service model, and instead have the insurer send a monthly statement with each service listed and its accompanying co-pay. That way, employees can see exactly where the costs are coming from if they used any services that month.

No interest

If an employee needs to pay off their co-pay over time, then Dr. Bricker advises employers to ensure their plan does not demand interest. For example, SimplePay provides 0% interest for up to 12 months. If an employee needed to pay off $1,200, they could contribute $100 each month without feeling like they are being punished for seeking care, underlines Dr. Bricker.

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"Current plan designs cause financial hardship — by and large, the people with medical debt have insurance," he says. "One of the main goals of a zero deductible co-pay-only plan is to make the health insurance plan more affordable and make it an actual benefit."