If you’ve paid attention to the news over the past year, you’ve likely seen stories of swelling inflation rates in the United States. Last October, the annual inflation rate in the U.S. reached 6.2%, the highest it has been in more than three decades, as measured by the consumer price index. But it didn’t stop there. It climbed to 6.8% in November before reaching 7% in December.
Even if you haven’t been diligently tracking the numbers, you’ve undoubtedly encountered the real-world consequences of rising rates. As inflation rates climbed throughout 2021 — set against a backdrop of COVID-19 peaks and valleys and supply chain disruptions — the demand for certain goods outpaced their supply. As a result, we saw shortages and price hikes in categories like housing, gas, food, and even used cars (some of the biggest drivers of inflation in 2021).
These price surges essentially zapped the purchasing power of the average American family, which has set the stage for the Federal Reserve to raise interest rates in early 2022 with hopes of slowing inflation. In the meantime, families are forced to rethink how they allocate their limited funds. Their paychecks won’t go as far as they once did — unless their wages increased at the same pace, which hasn’t been the case for most Americans. Amid the uncertainty, Americans need a better way to pay for necessary goods and services without going into the red.
To be fair, this isn’t the first we’re hearing of the declining purchasing power of Americans. The media trope of the Millennial generation “killing” industries practically defined the 2010s. But by 2018, economists were singing a different tune: Millennials weren’t murdering mayonnaise; they were simply facing a bleaker economic reality. Economists have actually determined that this consumer group has similar consumption habits to Generation Xers and Baby Boomers.
The real problem is that Millennials — and now older Generation Zers — have lower earnings, fewer assets, and less wealth than previous generations. Even before the pandemic, the homeownership rate among Millennials was eight percentage points lower than it was for their parents and grandparents when they were similar ages. And that’s because the ratio of home prices to incomes has more than doubled since the late 1980s in popular cities like Miami, Denver, and Seattle.
Millennials are also saddled with a significant amount of student loan debt. Graduates under the age of 35 are nearly 50% more likely to have student loans than Gen Xers, and their median loan balance is 40% higher than older generations.
And of course, we can’t forget about the high cost of healthcare in the U.S. Overall, Americans are paying more of their health plan premiums and facing higher out-of-pocket costs for varied healthcare services. In 2020, 46% of insured Americans had difficulty affording out-of-pocket healthcare costs; in 2021, one-third of working Americans saw those costs increase.
As costs have risen, more Americans have been forced to delay or skip necessary care due to prohibitive prices. A report from Wolters Kluwer shows that Millennials are twice as likely as Baby Boomers to forgo necessary care because of cost. The Fed Reserve also found a strong connection between patients’ income levels and their odds of skipping care, with more than a third of those earning less than $50,000 skipping medical care.
But there’s no such thing as “skipping” a medical emergency. What has mostly fallen by the wayside is important preventive care like vision services, mental health care, and dental care. A Kaiser Family Foundation poll found that nearly 40% of American adults had skipped or delayed dental care because of cost concerns. This is a dangerous game to play.
Delaying care might help an individual avoid medical debt in the short term, but postponing tests and routine exams can have severe long-term consequences. Regular dental care, for example, can help detect myriad chronic conditions before they become unmanageable.
Using ‘Buy Now, Pay Later’ to Fight Inflation
With all of this said, the need for an easier way to pay for necessary things (like healthcare) couldn’t be more urgent. Did you know that 50% of Americans currently have medical debt? It’s no longer enough for employers to give their employees a one-size-fits-all health insurance plan and call it a day. Instead, consider the ways you can ease the burden of medical costs during this economically fraught time.
Buy now, pay later programs have long been fixtures of the retail space, but it’s time we brought this payment model to the healthcare world. Paytient accomplishes this by working alongside your existing insurance plan to remove cost as a barrier and encourage your employees to seek the care they need when they need it.
Participants simply swipe their Paytient cards at the time of care — whether they’re receiving medical, dental, vision, or even veterinary care. We cover the cost upfront, and your employees can effortlessly pay at their own pace via payroll deductions. Best of all, Paytient’s buy now, pay later program has no credit checks or hidden fees. And members always enjoy 0% APR on all transactions with their Paytient cards.
Economists thankfully expect inflation to slow down in 2022 — albeit gradually. That said, the cyclical nature of our economy means it won’t be long until inflation and interest rates begin to creep up yet again. So don’t wait! Empower your employees to get the medical care they need by adding Paytient to your benefits package, and watch them bring their best selves to work every day.