Why does choosing a health plan have to be so hard?

May 28th, 2021

You’d be hard-pressed to find someone who actually feels confident choosing a healthcare plan. It’s one of those decisions we have to make in life that is almost universally stressful, even for people who seem to have a better-than-average understanding of the many factors involved.

It’s not surprising that people experience considerable stress when choosing a health plan: For one thing, health insurance is littered with terminology that most adults only kind of understand. In fact, a study of over 2,000 Americans found that although most adults thought they could correctly define four common health insurance terms (deductible, coinsurance, co-pay, and out-of-pocket maximums), only 4% actually could

Even if you have a firm grasp on the jargon, choosing a health insurance plan is still a complicated decision involving many factors, some of them impossible to know and some of them difficult to find out. And if you choose incorrectly, it could cost you literally thousands every year. 

And sadly, many people do choose incorrectly. In one study of over 2,300 employees, when presented with two plan options, almost a quarter of employees picked the one that left them worse off financially, even though they offered the same non-cost benefits. This one decision cost the employees an additional $2,000 in a single year. 

Unfortunately, we can’t avoid making this decision. Employers can do what they can to select the best options to offer their employees, and inform them of the benefits of each. But beyond that, it’s up to individuals to figure out what matters most to them, and make as informed of a decision as possible. Then, it’s also on individuals to understand and make the most of their plan benefits. 

It’s a lot of responsibility to put on people who are already working full-time jobs. People who use their insurance more often are more likely to feel confident selecting a plan that is right for them, which makes sense: They’ve been through the process of finding an in-network provider, they’ve seen the medical bills and witnessed what has or has not been covered. 

But individuals who haven’t made use of their health insurance are at greater risk of choosing incorrectly during the narrow window of Open Enrollment. In other words, if you don’t understand what a deductible is, or how an out-of-pocket maximum affects you, you could unknowingly choose a health plan that is out of your budget for a full year. Which can have a devastating effect on both your budget, and your health: If you can’t afford your out-of-pocket expenses, you’re more likely to defer or postpone the care you need. 

Health insurance providers obviously have work to do when it comes to helping individuals understand how to make the most of their coverage. But they aren’t necessarily incentivized to do so. Employers, however, are incentivized to help their employees get the care they need: Healthy employees are more likely to show up for work and perform at their best. 

How employers can help

So what can employers do to help their employees understand their health plan options and make informed decisions? Or, perhaps a better question is: what can employers do to reduce the financial risk of choosing incorrectly? 

For the first question (helping employees make informed decisions), employers can dedicate more time and effort to helping employees understand their options when it comes to choosing a health plan. Working with health insurance providers to connect employees with educational resources is a step that every employer can take to help their employees feel more confident about choosing the right plan.

The second question (helping to reduce the financial risk of choosing incorrectly) is one that Paytient is uniquely positioned to address. By offering Paytient as a benefit to employees, employers can help make out-of-pocket expenses more affordable for their employees -- whether those out-of-pocket expenses are $1,000 or $5,000 or more. Even if an employee chooses a plan that ends up having higher-than-anticipated out-of-pocket costs, they aren’t left totally without options for how to afford them. 

Offering Paytient greatly reduces the risk that an employee would be so priced out of coverage, that they wouldn’t get the care they or their family needed. 

But the benefit of offering Paytient as a benefit goes beyond this. Having greater flexibility for how to pay bills makes good financial sense for every employee:

- If an employee chooses a high-deductible option, Paytient helps make out-of-pocket costs more affordable by allowing them to pay them off interest-free over time

- If you offer have an HSA option, Paytient allows employees to keep money in their HSA and actually use it as a savings vehicle (because they can use Paytient to pay off your expenses as they come up).

- If an employee chooses a low-deductible plan, Paytient still helps with making the out-of-pocket medical, dental, and vision costs more affordable, and can provide a flexible payment option for veterinary expenses as well.

Although choosing a health insurance plan might never be a simple choice, offering Paytient is a concrete way employers can help to make it a less stressful one. 

To learn more about offering Paytient for your employees, contact our sales team.

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