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The Future of Patient Financing for Employers

Even with health insurance, many Americans struggle to afford their healthcare expenses. Offering a Health Payment Account as a supplement to your health plan can improve the wellness of your employees.

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What would your employees do if they were faced with a large and unexpected healthcare expense? Would they be able to pay for it from their savings? Would they have to borrow money? Or would they put it on a credit card and hope to pay it off as quickly as possible?

Many Americans have experienced this difficult choice between physical and financial health. About a quarter of Americans have admitted to deferring or delaying medical care due to an inability to pay. That’s unacceptable.

The Importance of Patient Financing Solutions

Surprise expenses can wreak havoc on the finances of every employee. And when we're talking about healthcare costs, they are frequently unexpected and exorbitant.

A survey by Bankrate suggests that only 39% of Americans have enough money saved up to withstand a $1,000 emergency. Considering the Federal Reserve reports about 17% of Americans faced unanticipated medical costs of $1,000 and $1,999 in 2020, that means quite a few families are stuck borrowing money from family and friends, using high-interest credit cards, or even taking out personal loans when emergencies arise.

The end result? A hefty dose of employee financial stress. And when people are stressed out, their job performance typically suffers as a consequence. A survey by John Hancock found that 58% of workers reported stress as a result of financial problems; and 40% of those same respondents said that stress makes them less productive at work.

It behooves employers to find ways to alleviate this stress for their employees by offering patient financing solutions. But with no shortage of options available on this front, many HR leaders wonder where they should invest their time and energy.

The Current State of Employer Patient Financing Plans

Quite a few employers have started to include Health Savings Accounts (HSAs) as a means of providing healthcare patient financing. Some even offer to contribute — or match employee contributions — as an extra incentive to take advantage of this benefit. Contributing to an HSA should theoretically make it easier for employees to handle their out-of-pocket medical expenses, including deductibles.

In a perfect world, those same workers wouldn’t have to use this account to cover health-related expenses; they could instead contribute funds to their HSAs, invest that money over time, and then benefit from the growth.

For workers who can follow that formula, HSAs make it possible to boost their financial wellness while building long-term wealth. But for most folks who have HSAs, this is not the case. Most account holders — more than 80% — are not in a financial position to contribute the maximum amount to their HSA. And even if they manage to set aside money, they don’t always have the ability to let those funds accumulate over time.

In reality, most people don’t have enough money in their HSAs to cover their deductibles in a given year: Roughly 78% of people on high-deductible health plans report an HSA balance that’s smaller than their deductible.

Most employers view HSAs as a healthcare patient financing tool that helps employees afford their medical expenses and build financial wellness over time. Perhaps you even used this argument to motivate your team members to opt for an HDHP. But for most Americans, the math just doesn’t add up.

Health Payment Accounts: The Future of Patient Financing for Employers

Patient financing for employers can be tricky, but there's a great option available: a Health Payment Account (HPA) that complements your existing health plan. An HPA offers a way for employers to provide their employees with a patient financing solution — or even to provide dental financing for patients — at a surprisingly affordable cost.

Paytient does this by giving employees access to an interest-free line of credit they can use to cover medical, dental, vision, pharmacy, and even veterinary expenses. Each time an employee uses their HPA, they choose how to pay the balance in a way that works for their budget and financial health — all without interest or fees.

Offering HPAs as a patient financing solution enables your employees to lead healthier lives by accessing care earlier without financial harm. It also helps reduce the cost of healthcare for employees and employers alike. When employees get the care they need, they are less likely to be responsible for the types of large claims that can increase premiums and cost-sharing for everyone.

Companies that offer Paytient to complement their existing health plans reduce their financial risk, improve collections for healthcare providers, and allow employees to get the care they need when they need it — a rare win-win-win in the world of healthcare.

The Business of Healthcare
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