Drowning with a life-preserver: What it means to be functionally uninsured in America

When people pay for insurance — whether it's on a home, automobile or something as precious as their own health — they rightfully expect a certain amount of help in the event of an emergency. A new car to replace a vehicle totaled in a crash. A new roof to repair the damage from a surprise windstorm. Or financial relief to help cover the cost of a serious medical diagnosis. 

What people don't expect is the very real possibility that they will need to take on new debt just to access the care they've already been paying for through their monthly premiums, co-pays and ever-rising deductibles. And yet, this is the reality facing millions of insured, hardworking families across the country. These are the functionally uninsured, and they are the reason HR and benefits executives are so focused on improving employer-sponsored healthcare to make it more affordable and accessible.

At the recent Employee Benefit News Benefits at Work conference, I had the pleasure of meeting with other benefits professionals from across the country. Understandably, the rising cost of healthcare was a huge concern for many. We were all faced with the same question: How can we ensure that our employer-sponsored health plan offers access to quality care, without causing financial burdens on our employees?

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Health insurance dysfunction is sinking households and businesses

Despite more people having health insurance today than at any other time in recent history, 41% of all Americans carry medical debt, including those who have coverage through their employers. For most companies, that coverage comes through a preferred provider organization (PPO) health plan, which prioritizes convenience, but isn't necessarily the best value for employees. Due to the rising cost of healthcare, many businesses have been forced to pass additional costs onto employees. Some organizations offer high deductible health plans with family deductibles anywhere from $3,200 to as much as $16,100. Given that nearly half of Americans cannot afford an unexpected $400 bill, these rates are simply out of reach for most. 

The impact of being functionally uninsured is widespread, affecting physical health, financial stability and overall well-being. For many, it means making difficult decisions — like spending less on food, clothing and cutting back on extracurricular activities for the kids. Or it means forgoing necessary medical care with a full understanding that it could cause an even more expensive health outcome later. At a certain point — and I think we passed it long ago — we must wonder: How much is too much for households to pay for healthcare? 

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Charting a new course with a proven health plan alternative

Let me be clear. Businesses aren't at fault here. According to Mercer, the average business pays nearly $16,000 annually per employee for healthcare, and this sum is only projected to increase. That's an unpredictable and often unchecked expense that hurts the prospects of businesses and families alike. 

At Hendry Marine, a full-service shipyard in Tampa, Florida, we offer a range of maritime services. Our healthcare costs were rising year after year. We understood that neither the company nor the employees could continue assuming the additional expenses. The current dynamic was simply unsustainable — not just for us as a business, but for the Hendry Marine families counting on us to offer the best, most affordable health plan options we can find.

If you ask our people, they'll tell you that working at the shipyard is rewarding, but it's also physically demanding. Most of our workforce is composed of males in their late 40s and early 50s — a population with great potential for catastrophic health events or serious but treatable diagnoses like cancer, diabetes and high blood sugar. It was important for me and our company's leaders to offer an affordable health plan that prioritized preventive healthcare and made it as easy as possible to access. 

Before I joined the company, they had already made the move to a self-funded health plan through a large insurance carrier, but within a year we were handed yet another cost increase. That's when we found a different self-funded solution that worked better for us. It uses reference-based pricing to reimburse healthcare costs in line with accepted industry benchmarks. For Hendry Marine it meant we could spend less on healthcare, pass the savings along to our people and insulate ourselves from rising costs. For me, it also felt good to know that our health plan would help protect people from having to make the same difficult decisions - do I pay for groceries, or do I pay for healthcare?

But it wasn't just about the savings. The plan also offered an enhanced level of transparency into our usage data. What we found was alarming. Only 15% of employees were taking advantage of our preventive wellness benefits. For a high-risk population, that's a problem. With millions in savings from our health plan, we realized we could bring a mobile, walk-in clinic directly to the shipyard for workers who might be reluctant to see a doctor. It has been lifesaving for some of our people.

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Arriving together at a better plan for affordable healthcare

The rise of the functionally uninsured and the growing consumer medical debt crisis are both byproducts of out-of-control healthcare costs. Rather than asking families to invest in their health at the risk of acquiring new debt, employers can recognize and address the deficiencies of health insurance coverage and start righting this massive ship. Ensuring that all individuals have access to comprehensive and affordable healthcare is not only in the best interests of businesses across all sectors, but it's also a big step forward in building a healthier, more prosperous society. And that's something we all benefit from.