Health Savings Account Blog

“As the responses indicate, rising health care costs are leading to an erosion of savings and a decline in overall financial well-being. When consumers are faced with tough financial decisions, it often leaves them with little left for savings,” said Jerry Ripperger, director of consumer health for the Principal Financial Group. “Due to rising costs, Americans are falling behind in savings and struggling to handle even basic expenses, which over time has had a significant impact on their confidence in the healthcare system.”

Health Coverage Trumps Increased Pay

When asked specifically about employment-based coverage, most Americans value those health benefits more than an increase in salary. In fact, three-quarters of those with employment-based benefits state they would prefer $6,700 in employment-based coverage over an additional $6,700 in taxable income. Workers said they would need at least $11,000 in additional taxable income to willingly give up employer-sponsored healthcare.

Not surprisingly, the majority of those surveyed report increasing dissatisfaction with the healthcare system with six in 10 Americans rating the system as fair (28 percent) or poor (31 percent). Those dissatisfied with costs increased dramatically with 52 percent saying they were not satisfied or not too satisfied with health costs, compared with 33 percent in 2005.

“Those unhappy with the current system base this largely on rising costs, so it’s logical they would place a high value on health benefits provided by their employers,” noted Ripperger. “Employers should take note, health insurance is not only highly valued by employees, it’s also the most requested workplace benefit. Our experience has shown that high-quality benefits help employers by actually encouraging employees to work harder and stay in their current position longer.”

Quality of Care More Important Than Cost

Although cost was identified as a primary driver for dissatisfaction, the survey revealed that Americans still use quality rather than cost as their primary consideration when making decisions about care. They give more weight to quality when choosing a provider for open heart surgery (89 percent) and cancer treatments (87 percent), while others consider quality over cost when seeking lesser treatments like immunizations or an annual physical (72 percent each).

“When faced with serious health issues, quality is often the most important factor and many Americans feel quality would improve if they had more responsibility for their own care decisions,” said Ripperger. “Programs that include components of consumer driven health care like health savings accounts and wellness programs are increasingly important ways to engage employees to become more involved in healthcare decisions.”

Specifically respondents say that the quality of medical care they receive would improve if they had access to more information about the success of different treatment options (74 percent), information comparing doctors and hospitals on both quality and cost (70 percent). They also believe it would be better if both doctors and hospitals were required to supply information about quality and costs (61 percent).

Perception May Not be Reality For Personal Health

When faced with rising costs, some Americans’ are taking action with many choosing generic drugs when available (82 percent) and talking to their doctor about treatment options and costs (57 percent). Others say they are trying to take better care of themselves as a way to fight costs (80 percent, up from 71 percent in 2005).

“Changing health behaviors is the best way we can make a significant impact on rising costs, but with obesity rates and other health indicators on the rise, I’m not sure Americans are really putting their money where their mouth is,” said Ripperger. “This highlights the need to educate employees about not just healthcare, but also their overall health. Making smarter choices will ultimately impact rising costs and will hopefully begin to change overall health confidence.”

Full results of the 2006 EBRI Health Confidence Survey are published in the November issue of EBRI Notes, which is available on EBRI’s Web site at www.ebri.org.