Health Care Costs Hurting Personal Finances

According to a press release on the results of the 2006 Health Confidence Survey from the Employee Benefit Research Institute and Mathew Greenwald and Associates, Inc. and underwritten by the Principal Financial Group, 36% of respondents said increased health care costs result in a decrease in savings for retirement, up from 25% who said so in 2004. Additionally, 28% reported difficulty in paying for basic necessities, up from 18% in 2004.

The effect of health care costs on personal finances is so significant as indicated by the survey, that most respondents indicated they value health benefits from their employer more than an increase in salary. Three-quarters of those with employment-based benefits state they would prefer $6,700 in employment-based coverage over an additional $6,700 in taxable income, the release said. Workers said they would need at least $11,000 in additional taxable income to willingly give up employer-sponsored health care.

Those dissatisfied with health care costs has increased dramatically, with 52% saying they were not satisfied or not too satisfied with health costs, compared with 33% who said the same in 2005. Respondents also report increasing dissatisfaction with the health care system, with six in 10 Americans rating the system as fair (28%) or poor (31%).

“Those unhappy with the current system base this largely on rising costs, so it’s logical they would place a high value on health benefits provided by their employers,” said Jerry Ripperger, director of consumer health for the Principal Financial Group, in the news release.

To fight costs, respondents said they are choosing generic drugs when available (82%), trying to take better care of themselves (80%), and talking to their doctor about treatment options and costs (57%).

Though unhappy with costs, respondents indicated that quality of care is still the primary factor in choosing health care providers. Respondents said the quality of medical care they receive would improve if they had access to more information about the success of different treatment options (74%) and information comparing doctors and hospitals on both quality and cost (70%). Respondents also said they believe it would be better if both doctors and hospitals were required to supply information about quality and costs (61%).

Full results of the 2006 EBRI Health Confidence Survey can be viewed in the November issue of EBRI notes at www.ebri.org .