Creative Financing Options are Key to Improving Health Equity

Financial wellness is an essential social determinant of health. The ability to pay for healthcare is one of the key factors affecting a person’s well-being outside of their medical history. For the 78% of Americans who live paycheck to paycheck, the upfront cost of healthcare has become a substantial barrier to overall well-being.

Medical prices are rising faster than inflation, and out-of-pocket expenses have reached unsustainable levels for many, forcing families to make difficult choices: take on medical debt using high-interest credit cards, or avoid care altogether to remain afloat.

Unfortunately, avoiding care is all too common. In 2023, over a quarter of Americans skipped some form of medical care due to cost, often resulting in significant long-term health and financial impacts. Delaying care until it becomes critical can mean higher treatment costs and added strain on emergency and in-patient services. This choice is particularly prevalent among people in lower-income brackets who are nearly twice as likely to report delaying or avoiding care due to cost. 

Upfront medical costs are not only affecting affordability for all, they are also deepening the divide between high- and low-income patients. A new approach to healthcare payments is essential. Employers play a unique role by helping employees unlock access to the care they need.

Unlocking financial access to care

Imagine that navigating the current healthcare system is like moving through a series of locked doors, with financial barriers blocking access at each stage. Examples include the increasing trend of providers requiring upfront payment to secure a procedure or treatment date, increases to employee premiums that reduce take-home pay, and high deductibles or copayments that are difficult to manage financially. These barriers can cause employees to disengage from health seeking behavior. 

By layering innovative financial solutions into their benefits programs, employers can provide employees with the keys to unlock these doors more quickly and sustainably.

Two financing options are emerging at the top of HR and CFO agendas. Each allows employees to access care when needed, reducing care avoidance and improving long-term health outcomes. When employees can access care at the right time and at the right place of service, it reduces the likelihood of costlier services and can lower annual medical trend for the participating employer. Both models spread payments over time, and come at no cost to the employee, helping reduce reliance on high-interest options and saving money for both parties. 

The access key – opening the door to equitable access to care

One financing approach is the access key, opening the door to timely healthcare. It unlocks a new payment model that covers all in-network out of pocket expenses up to an employee’s out-of-pocket maximum. Rather than employees having to cover their medical bills upfront, employers can partner with healthcare payment solution providers to help their employees manage their medical costs over time through flexible, interest-free payment plans.

In this model, providers are also paid upfront, removing them from the billing and collections business, and allowing them to focus on what they do best – providing care.

This benefit also includes a simplified monthly statement for the employee, which adds transparency and reduces confusion. All employees are automatically enrolled in this benefit, regardless of their credit scores, and given equal access to unlock critical healthcare services.

The wellness key – unlocking access to broader wellness costs

Healthcare costs often extend beyond basic care to include things like braces, fitness memberships, eyeglasses, and elective surgeries that are not covered by traditional health plans. Those everyday healthcare costs even extend to our pets. How often do unforeseen vet bills for these critical family members strap a household budget? For many families, these expenses are often weighed against other critical household bills or charged to standard credit cards with high interest rates. 

A growing number of employers nationwide are recognizing the need to improve their wellness initiatives by offering additional support. The second financing model provides employees with another comprehensive key to care – a health spending card. This simple card-based program can be used to manage a broad range of health and wellness expenses through flexible, interest-free repayments. Employers include the offering in their financial benefits package and can configure how the program is delivered to their employees, from a set spending limit to the allowed spending categories. Employees can activate the card as needed throughout the year, ensuring funds are always available when and where they need them. 

Equitable access for all employees

Together, these new financing options provide better access to comprehensive health and wellness care for all employees. Employers frustrated by the rising costs of healthcare who have been forced to shift more cost to employees by raising deductibles and out-of-pockets, are now able to give employees a universal set of keys to care, all while reducing cost. 

This allows for more equitable access since they are offered to all employees regardless of credit history. With 46% of traditional credit applicants who have an income below $50,000 reporting they were denied credit or approved for less than they requested, these new approaches to healthcare payment can drastically reduce the affordability disparity between lower and higher income levels. 

By providing better access to all health and wellness related expenses, these new creative financing solutions help improve health equity by helping all employees unlock access to the care they need, when they need it, not just when they think they can afford it.

Photo: StockFinland, Getty Images

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