Health and Productivity Challenges for Lower-income Workers
Health Insurance, Plan Design and Barriers to Care
Lower-income employees may be at a particularly high risk of experiencing cost-related barriers to care. Even when they have employment-based health insurance, high-deductibles, coinsurance, and health care and prescription medication costs can often keep health care out of their reach.
To explore the productivity losses that cost-related barriers to care can impose on employers, IBI analyzed the links between lower-income employees’ health insurance, cost-related barriers to care, and illness-related absences from work.We found that barriers to care were linked to significantly higher sick day absences—the value of which may negate savings from cost-sharing strategies. Findings for employees with family incomes above $35,000 suggest similarly high lost productivity.
- From 2007 to 2017, two out of five lower-income employees (with annual family incomes less than $35,000) were uninsured. Among the insured, one in six were enrolled in high-deductible plans (defined as greater than $1,100 for a single person and $2,200 for two or more enrollees in a plan). Half of insured lower-income employees did not have coverage for prescription medications.
- One in three lower-income employees experienced a cost-related barrier to care over the course of 12 months. Nearly one in four delayed needed care, compared to about one in five who could not afford medical care, and almost one in six who could not afford prescription medications. Only about one in 20 reported that they needed but could not afford mental health care.
- More than half of uninsured lower-income employees experienced a cost-related barrier to care, compared to about one fifth of insured lower-income employees.
- Compared to insured employees in plans with low deductibles, lower-income employees enrolled in high-deductible plans were 75% more likely to experience a cost-related barrier to care. Health savings accounts did not reduce the risk of experiencing cost-related barriers for employees with high-deductibles. However, flexible spending accounts and coverage for prescription medications were associated with reduced risk of experiencing cost-related barriers to care.
- On average, a lower-income employee who experienced a cost-related barrier to care had 1.9 more lost workdays per year than a lower-income employee who experienced no barriers to care—a 70% increase in lost work time from a baseline of 2.7 days.
- While employees with incomes above $35,000 experienced fewer barriers to care, the association with health insurance and plan design was stronger than was observed at lower income levels. Barriers to care had a similar impact on lost workdays across the income distribution.
Guidance for Employers
Rising health care costs impact both insurance plan sponsors and patients. For this reason, employers will likely include some form of cost-sharing in their employee health benefits for the foreseeable future.
To help employers design benefits policies that balance the need to manage treatment costs against enrollees’ access to cost-effective, timely and beneficial care, IBI sought input from experts at leading healthcare, benefits and absence management firms. A summary of their guidance follows.
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