Over the last 10 years, out-of-pocket health care costs for Americans have more than doubled, with medical expenses now accounting for 8 percent of annual household spending, according to the Consumer Expenditure Figures.
April is National Financial Literacy Month, an ideal time for people to evaluate their financial well-being and take steps to become more savvy consumers, especially when it comes to health care. With national health care spending now exceeding $3.2 trillion annually, it is crucial for New Jersey residents to become more thoughtful health care consumers.
Here are five ways to help people better navigate the health care system, which may improve their personal and financial fitness.
Do you know the difference between co-payment and co-insurance? Don’t worry, most people don’t. In fact, just 7 percent of Americans were able to successfully define all four basic health coverage terms: premium, deductible, copayment and coinsurance, according to the recent UnitedHealthcare Consumer Sentiment Survey. By understanding these terms, people can help maximize the value of their health benefits and help avoid unnecessary or surprise medical bills. There are a number of tools online, including the justplainclear.com glossary, available in English and Spanish, to help people learn or review health insurance terms.
An estimated 70 percent of employers already offer wellness programs and 8 percent more plan to do so during the next year, with some programs offering financial incentives, according to the Society for Human Resource Management. The value of corporate wellness incentives has increased to $693 per employee per year, up from $430 five years ago, according to a recent study from the National Business Group on Health. However, the study found that fewer than half of eligible employees earned the full incentive, with workers leaving millions of dollars of unclaimed rewards. Some wellness programs now include activity trackers, which help enable some employees to earn up to $1,500 per year in incentives by meeting daily walking goals. Likewise, websites such as achievemint.com enable people to earn cash rewards for walking.
More employers are offering health plans that include a Health Savings Account (HSA) option. An HSA is like a personal bank account specifically for health-related expenses – you own all the money in it, including contributions from your employer. HSAs offer a triple tax advantage: money is deposited pre-tax from your paycheck and accrues interest tax-free, and withdrawals are not taxed as long as funds are used for qualified health-related expenses. With a growing number of Americans now enrolled in a consumer-directed health plan, these types of savings accounts will become increasingly important.
There are many places for people to seek care, including urgent and convenience care clinics that are often more cost-effective and offer shorter wait times than other health care facilities. The growing availability of telemedicine is making routine and preventive care available online and through mobile devices, with the cost of a video-based virtual visit (usually less than $50) offerings savings when compared to costs for similar minor medical needs treated at a doctor’s office (approximately $80), urgent care facility (approximately $160) or emergency room (approximately $650), according to UnitedHealthcare claims data. Recent advances in audio and video technology are enabling people to obtain a diagnosis and necessary prescriptions for minor medical needs including allergies, sinus and bladder infections, bronchitis and other conditions.
Maintaining your health includes more than just medical coverage. Consider adding dental and vision plans, which can protect you and your family from head to toe. Research suggests a connection between oral health and overall health, so adding a dental plan may help prevent larger medical issues. A vision plan may offer eye exams that can help identify chronic conditions such as diabetes, and offer reduced pricing on frames and lenses. Financial protection products, such as critical illness or hospital indemnity plans, can help provide important safeguards for unexpected health situations.
Paul Marden is CEO of UnitedHealthcare, New Jersey. In this role, he is responsible for all aspects of the company’s commercial health benefits business in New Jersey, including growing and retaining members, establishing market and network strategies, achieving financial targets and acting as a primary interface with key stakeholders.