The saving rate in the U.S. ranks among the lowest in the world, in a country that rates among the richest nations. So imagine how well Americans save for healthcare?
“Consumers are not disciplined about saving in general,” with saving for healthcare lagging behind other types of savings, Alegeus observes in the 2018 Alegeus Consumer Health & Financial Fluency Report.
Alegeus surveyed 1,400 U.S. healthcare consumers in September 2017 to gauge peoples’ views on healthcare finances, insurance, and levels of fluency.
As patients continue to take on more financial responsibility for healthcare spending in the U.S., they are struggling with finances and don’t believe they can save for medical expenses. One-half of Americans live paycheck to paycheck, Alegeus learned, and one-third have a problem with debt.
Exacerbating this picture of financial un-wellness among millions of Americans is the fact that consumers “don’t know what they don’t know” when it comes to how their health insurance works — that is, how to benefit from their health benefits.
One-half of people could not correctly answer simple questions about the definitions of a health premium or a deductible, for example. Thus Alegeus says that peoples’ overall health insurance fluency is low.
This lack of health financial literacy leads to real hard-dollar losses impacting health consumers’ pocketbooks. Americans’ estimated $371 billion out-of-pocket spending in 2018 could result in $85 bn in potential consumer savings were people to use pre-tax dollars conserved in financial and health savings accounts (FSAs and HSAs), Alegeus calculated.
Health Populi’s Hot Points: Americans are stressed by out-of-pocket healthcare costs, the second chart shows, so there’s a double-whammy health effect here: first, financial, where people who could optimize healthcare spending by saving in an FSA or HSA. Second, a mental and potentially physical health impact from that financial stress.
The patient-as-payor lacks confidence and competence in being that envisioned consumer-directed-healthcare persona.
Thus Alegeus concludes that consumers need support to take a more active role in their healthcare, via tools, encouragement, access to information, time and knowledge.
At the root, though, will continue to be Americans’ low savings rates across-the-board, from simply saving for emergencies through healthcare — the lowest level of saving that Alegeus discovered as the first chart indicates.