Last year saw a significant rise in healthcare costs, with a Marsh McLennan Agency (MMA) report highlighting a 5.2% increase in employer health benefit expenses per employee, pushing the average contribution to premiums up by more than $1,400 to $11,762. This escalation in healthcare expenses isn’t just a concern for employers; 38% of Americans have postponed medical treatments due to cost issues, a decision that can lead to deteriorating health.
The burden of healthcare inflation is notably heavier on younger generations, with a considerable number of millennials and Gen Zers avoiding doctors’ visits to save money—74% and 56% respectively, as opposed to just 13% of Baby Boomers. The tendency to delay seeking care, especially for behavioural health issues, poses significant risks and costs, particularly for these younger demographics, according to Monte Masten, MMA’s chief medical officer.
Moreover, millennials and Gen Z employees are less likely to utilize primary and preventative care, often resorting to urgent care or emergency services more frequently than older employees. This shift is especially problematic for behavioural health, where the absence of regular care can lead to emergencies, escalating costs for both the individual and employers.
The increasing need for both mental and physical healthcare services, alongside rising prescription drug costs, has led to higher benefits expenses for three-quarters of employers in 2023. Millennials, experiencing the highest rates of mental health conditions among all generations, alongside their reported concerns over the cost of living, highlight the acute impact of these trends on younger workers.
In response to these challenges, some employers are adopting incentive programs to encourage regular health check-ups and preventative care. For instance, Blue Cross Blue Shield of Massachusetts offers a wellness program that rewards small business employees and their employers for health maintenance or improvement efforts. Marathon Petroleum Corporation collaborates with WebMD to offer incentives for completing health-related activities, including annual physicals.
Masten also suggests that digital healthcare could be a valuable tool in combating low care utilization, offering a way to strengthen the patient-physician relationship through technology. Companies like Walmart and members of the Health Transformation Alliance are exploring virtual care partnerships to alleviate the financial and health impacts of underutilized primary and preventative services. These initiatives aim to make healthcare more accessible and affordable, especially for younger workers who are currently the most affected by healthcare inflation.
