High healthcare costs are deterring individuals from enrolling in their health plans.
That’s the latest finding from HSA Bank, which surveyed 2,000 U.S. healthcare consumers in its sixth annual 2023 Health and Wealth Index report and found that over half (51%) of respondents say rising costs are a “significant” barrier to not enrolling in a health plan.
HSA Bank notes that even among those who do participate in a health plan, most are uninformed about the costs they’re paying for healthcare. This is especially true among Gen Zers, who HSA Bank found continues to be the least informed about health plan costs while being largest cohort of uninsured individuals. This was followed by Millennials and Gen Xers.
However, while over half of consumers surveyed have not enrolled in a health plan, HSA Bank research shows that engagement scores for 2023 were on par as those last year, remaining at 56.6%. Twelve percent of individuals were minimally engaged, 45% moderately, 34% highly, and 9% optimally, according to the findings.
As participants demand mental health services, HSA Bank reported a rise in healthcare coverage from 23% to 27% in the past year. A focus on mental health was particularly strong among Millennial and Generation Z age groups, with 48% highly considering the healthcare benefit when researching a potential new employer, said HSA Bank. In fact, 61% of Gen Zers and 51% of Millennials said they would change employers due to improved benefits, compared to 31% of Gen Xers.
“These findings reaffirm the necessity for employers to understand and respond to changing health and wealth engagement trends and further underscores the crucial role employers play in bridging gaps in healthcare affordability, promoting mental wellness, and fostering future financial stability,” said Chad Wilkins, president of HSA Bank, in a statement.
Uncertain markets hit retirement readiness
The effects of inflation has drawn questions on whether near retirees could even afford medical care costs. A previous Milliman Retiree Health Cost Index found a healthy 65-year-old male retiree will need $134,000 for healthcare in his remaining lifetime, while that number rises to $155,000 for a woman retiree of the same age.
According to HSA Bank, 33% of respondents were unsure whether they could cover health care costs now or in retirement, and close to half (44%) said inflation has impacted their retirement savings.
Unsurprisingly, the research found older age groups are likelier to save money now for future healthcare expenses. Fifty-nine percent of those in Generation Z said they are more likely to, compared to 45% of Gen Xers.
Workers are also looking to their employers for help on unexpected and future medical costs. In its report, HSA Bank found that employees are taking interest in employer-sponsored retirement accounts that come with health savings accounts (HSA).
Additionally, 70% of respondents say they have made changes to their finances like creating a budget, paying off debt, funding an emergency savings account, and investing.
SEE ALSO:
- Employers Are Improving Health Care Affordability to Curb Rising Costs
- How Much a 65-Year-Old Retiring in 2023 Needs to Cover Healthcare Costs
- Inflation Causing Participants to Struggle with Finances, Mental Health
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.
