While consumers are increasingly confident in their healthcare decisions, a third of them continue to worry about medical costs in the next year.
HSA Bank’s annual Health & Wealth Index found that while 84% of surveyed respondents believe they made the right choice in selecting a healthcare plan, and 55.5% remain engaged in health and wealth activities.
Even though consumers are making improvements to their finances, including creating budgets (45%), paying off debt (41%), investing savings (33%), and saving for an emergency (27%), 35% say they are still concerned about paying for healthcare costs. Furthermore, 36% are unsure how to pay for healthcare costs in retirement.
As a result, respondents are looking to their employers for further support in managing healthcare costs. One way is by offering health savings accounts (HSAs), reports HSA Bank. According to the findings, 30% say they would leave an employer for improved benefits like a better HSA offering or contribution match. Of those who have an HSA, 65% report regularly or occasionally investing their funds to cover future healthcare expenses.
“Employers have long focused on supporting employees in their retirement journey with contributions and matches to their retirement plans, however, consumers are increasingly reporting a greater focus on personal and financial wellbeing,” said Kevin Robertson, Chief Revenue Officer at HSA Bank. “The workforce is looking for employers to support their ability to save for emergencies or support programs that enhance their wellbeing.”
The report comes as findings show that healthcare costs are likely to exceed Americans’ expectations in retirement. A Retiree Health Care Cost Estimate issued this month by Fidelity Investments found that an average 65-year-old retiring this year could expect to spend an average of $165,000 in healthcare and medical expenses throughout retirement.
Fidelity’s 2024 estimate has grown nearly 5% since 2023 and has more than doubled from its first estimate in 2002, signaling potential further increases for future retirees.
“Healthcare costs are among the most unpredictable expenses, especially when it comes to retirement planning,” said Robert Kennedy, SVP, Workplace Consulting at Fidelity. “The best time to plan for those healthcare costs is long before they occur.”
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.