In 2017, the nation saw an intense focus on healthcare from the White House, legislators, media, employers and concerned citizens. From healthcare reform to healthcare coverage, the state of care and coverage in our country received incredible scrutiny and attention.
Looking forward, what will be the hot healthcare topics in 2018? Here is the list of the top four healthcare consumerism predictions we expect to see emerge, or continue to evolve, in the next year.
In 2018, with more focus in the media and in Washington around all tax-advantaged account types, awareness will certainly grow around the savings potential associated with these accounts. However, how do consumers know where to place these monies to ensure it is the best investment?
While Healthcare Savings Accounts (HSAs) have historically been viewed as a tax advantage for the privileged, the truth is, these accounts offer benefits to the mass population due to a triple-tax advantage. Financial gurus have even elevated these accounts to be the best first dollar for retirement savings.
Let’s look at the retirement advantages or HSAs over 401(k)s. With 401(k) accounts, employees realize tax advantages in the year the funds are invested, however they are taxed on those funds, as well as any investment growth, when withdrawn upon retirement—regardless if those funds are utilized to cover lifestyle or healthcare costs.
By comparison, HSA funds are tax-free when set aside during the tax year, investment growth is tax-free, and withdrawals are tax-free when used to pay for healthcare expenses.
The tax-free advantages provided with HSAs allow account holders to more readily set aside and grow the estimated $300,000 needed to cover healthcare expenses during retirement, allowing them to allocate their retirement investment funds purely for lifestyle expenses—creating a perfect blend for retirement savings with optimal tax benefits.
While consumers have familiarized themselves with retirement accounts and Flexible Spending Accounts (FSAs), there continues to be a gap around the knowledge surrounding HSAs.
This lack of understanding has caused many to enroll in High Deductible Health Plans (HDHPs) for the savings in monthly premiums, but not take advantage of the tax-favored savings programs that were designed to reduce the burden now and in retirement.
In fact, according to a 2017 Mercer Survey, 53% of employers are offering these plans, up from 24% five years prior. What is surprising is that to-date, enrollment in tax-advantaged HSAs, one of the primary benefits of HDHP coverage, has not mirrored the same level of growth and is sitting at 24%.
For those employees making the move to HDHPs, many employers have jumped on board early in order to help their employees in these efforts.
Research from ConnectYourCare illustrates that the average amount withdrawn from an HSA to pay for healthcare expenses is $72.
Understanding that this expense is quite low, but wanting to encourage employees to take advantage of the lower monthly premiums HDHPs provide, many are taking advantage of emerging HSA solutions, such as ConnectYourCare’s HSA On Demand, that allow employees to accelerate those funds early in the plan year to cover those expenses.
This type of offering has allowed more employees to save on their monthly premiums without the worry of the upfront high deductible bill, resulting in close to 60% higher HDHP enrollment rates and thousands of dollars in employer savings on benefit plan operational costs. This trend will likely continue and help millions of Americans benefit from the advantages these accounts provide.
Regardless of age and demographic, consumers tend to value self-education now more than ever, especially with the answer to any question right at our fingertips. Consumers have migrated from a society who previously sought the opinions of professionals, to a society who turns to the Internet.
We read ratings and reviews. We watch videos and enter our data into calculators. We self-diagnose. We price shop to compare best prices-even on prescriptions. And the healthcare technology industry is responding to our thirst for information on demand.
Employers have started to make significant investments in resources that will help employees elect benefit plans that best suit their needs and provide an extra layer of education above open enrollment catalogues and fairs. We are a digital society, and the best tools to emerge in 2018 will be interactive, quick, simple to understand, and will deliver accurate information.
With the unsuccessful attempts to repeal and replace the Affordable Care Act behind us, Congress will have to collectively evaluate the overall landscape to determine how to guarantee patients have affordable care, while also ensuring healthcare providers are adequately paid for services rendered to put financial health back into the healthcare market.
With this, HSA and FSA contribution limit increases that were often talked about in 2017 as part of healthcare reform could certainly see a shift in 2018. So far for 2018, FSA limits only increased by a mere $50, and HSAs saw $50 and $150 increases for individual and family coverage, respectively.
However, we hope to see the discussion picked up again in 2018, as increasing the pretax contribution amounts gives Americans the opportunity they need to save for future medical expenses while creating a financial system that ensures providers are promptly paid.
As with any prediction, only time will tell what holds true, what fades out, and what comes later. But one thing is definite—change to the healthcare landscape is certain.