Rising healthcare costs not only affect individuals’ ability to access quality care but also pose significant challenges for health plans’ ability to manage financial sustainability and provide affordable coverage.

As medical expenses climb, health plans consider raising premiums and deductibles to address this problem. However, it’s important to understand the potential repercussions of these decisions on members.

When premiums and deductibles rise, there’s a real risk that members might skip out on both necessary and preventative care. This isn’t just bad for their health—it also creates extra work for health plans, who may find themselves investing more resources into managing the financial risks that come with having a disengaged member base.

Healthcare affordability is a multifaceted issue with many interrelated factors. Unfortunately, myths about healthcare affordability can obscure the true nature of the problem.

Myth 1: Having health insurance means you can always afford care

It’s a common misconception that financial challenges in healthcare are exclusive to the uninsured. In reality, many insured individuals also struggle with healthcare costs, especially those with high deductibles or co-payments. This issue is further complicated by a widespread lack of understanding about healthcare pricing and available options, which may explain why only 25% of consumers have shopped around for healthcare.

Despite widespread insurance coverage, affordability remains a significant issue. A recent Zelis study revealed that in the last 18 months, one-quarter of U.S. healthcare consumers were unable to pay a medical bill. Moreover, two-thirds of consumers met difficulties paying bills even within their insurance network, highlighting the pervasive nature of these financial challenges. Those earning less than $100,000 a year were particularly affected, often needing to arrange payment plans or facing an inability to pay at all.

Contrary to popular belief, however, there are ways to access more affordable care. With the right information and tools, consumers can shop around to significantly reduce their healthcare expenses. And the good news is that many are open to exploring lower-cost options, with two-fifths indicating their willingness to do so.

Myth 2: Lower cost equals lower quality

A common misconception is that higher-priced providers automatically deliver better quality care, but that’s not always true. Understanding the actual quality of care can lead to significant savings without sacrificing outcomes.

A comprehensive study in Health Affairs took a close look at how the prices paid to over 30,000 general internal medicine physicians impacted the cost and quality of care for nearly 770,000 adults with commercial insurance. The findings revealed no significant differences in care quality between the highest- and lowest-priced physicians. This was true even for key indicators like hospital readmission rates and hospitalizations that could have been avoided with good outpatient care.

Interestingly, even among patients who needed more intensive care and management, the quality of care didn’t vary much between the highest- and lowest-priced physicians. Notably, this lack of difference in quality came despite a 20% increase in total annual costs for patients of the highest-price physicians, further underscoring that higher prices do not necessarily equate to better care.

Considering other information like provider quality ratings rather than just price allows consumers to find high-quality, cost-effective care. As such, tools that compare provider quality and costs are essential for making informed decisions.

Holistic platforms can help consumers assess the quality and range of providers, revealing that the quality of care is cost-agnostic. This challenges the idea that higher costs mean better quality and shows that smart healthcare shopping involves looking at the quality of care, not just the price.

Myth #3: Shopping for care is hard and there are no tools to help

Many believe that shopping for care is complex, but recent improvements in price transparency and technology have simplified the process for consumers to make informed decisions.

For instance, some health plans now use digital platforms to offer customized recommendations for healthcare providers based on the consumer’s medical history, where they live, and what the plan covers, making it simpler to make decisions that suit consumer’s unique needs.

According to a McKinsey survey, a whopping 89% of people said they’d be interested in shopping around for healthcare services if they had the option. And between 33% and 52% said they would consider switching their healthcare provider if they could get cash rebates ranging from $25 to $100. These incentives encourage consumers to choose both cost-effective and high-quality healthcare options.

This transformation is reshaping the healthcare shopping landscape and contributing to lower costs across the health insurance industry. While McKinsey estimates that 73% of commercial healthcare spending is on services that consumers can shop for, it appears that many people aren’t yet taking full advantage of these opportunities. This highlights a significant shift towards consumer-driven healthcare and suggests there is huge potential for greater engagement and savings.

Myth 4: Healthcare costs will continue to rise indefinitely

Many assume that healthcare costs are destined to rise continuously, but this is a misconception that is increasingly being challenged. The future vision for healthcare includes not only leveraging generic drugs and innovative medical technologies but also a strong emphasis on preventive care to manage and reduce costs.

Bottom line? There is a growing commitment within the industry to make healthcare more affordable.

By ensuring that members can find the right care at the right price and equipping them with tools to shop around and know costs upfront, we can significantly alleviate the financial burden. This is particularly crucial for those with high-deductible health plans, who might assume that having health insurance automatically makes healthcare affordable, not realizing that out-of-pocket costs can still be substantial.

Moreover, encouraging members to engage more actively in their health management is vital.

This approach not only emphasizes preventive care but also ensures that members are making informed decisions about their healthcare, which can prevent costly interventions later. The goal is to create a healthcare system that is not just more affordable but also more effective and sustainable in the long term. This vision aligns with other budding industry initiatives like focusing on empowering consumers and promoting proactive health management strategies.

The way forward

Health plans must do more than offer a few budget-friendly options. It’s time to step up your game and make healthcare accessible and affordable for your members. Consider this your ultimate to-do list: 

  • Offer digital tools, so members can search to find the care they need, know the cost before they go, and compare their options. 
  • Promote preventive care, such as annual checkups, screenings, and immunizations, to help members stay healthy and avoid costly medical problems. 
  • Collaborate with community organizations and government bodies to provide access to resources and services needed to manage healthcare costs. 
  • Reward individuals who look for medical help and make and keep their appointments. 
  • Leverage consumer-centric APIs to ensure members have what they need in one seamless experience, without added resource strain. 
  • Provide tailored recommendations to guide members in selecting optimal providers, understanding costs, and accessing peer reviews. 

By focusing on these strategic areas, health plans can truly transform the healthcare experience for their members, making it not only more accessible and affordable but also more aligned with individual needs and preferences.

The wrap up

Simply put, the possibility of healthcare affordability is the boogeyman hiding out in all our closets, but that doesn’t mean we should resort to pulling the covers up and ignoring reality.

By debunking myths about healthcare affordability and taking decisive action, health plans can play a pivotal role in making healthcare more accessible and affordable for their members. It’s time for health plans to step up and lead the way towards a more affordable and sustainable healthcare system for all.

To see how Zelis can help your health plan on its path to more affordable care for all, download our latest whitepaper.