American workers continue to be concerned about health care costs and saving in retirement, according a random survey of 1,000 people commissioned by Lively and conducted by CITE Research that asked respondents about their personal finances and health care.
“The short-term financial impact of COVID-19 has been swift and damaging to many Americans,” Lively says in a report on the survey. “We know that COVID-19 has increased the retirement gap, and new data shows the extent of this impact: 60% of Americans withdrew funds from their IRA [individual retirement account] or 401(k) in 2020. An additional 27% borrowed against their 401(k) during COVID-19. A staggering 41% of these account holders did so to pay medical expenses.”?
The survey report adds that even as health care costs are already a problem for Americans, they are only likely to become more of an issue as workers retire.
Lively’s survey found that, overall, Americans plan to spend 40% of their retirement savings on health care costs. And those younger than 45 expect to spend a larger percentage on health care costs.
Due to cost, 46% of Americans say they have not gone to the doctor, 45% have delayed or skipped medications, and 44% have not followed a doctor’s recommendation faithfully. Eleven percent only go to the doctor when they have a medical catastrophe.
“But there is also positive news,” Lively says in its report. “There has been a clear shift in coverage access and continued focus on preventative care—even with pandemic restrictions. Six in 10 Americans visit the doctor for regular yearly preventative care, and over 15% of Americans are using telemedicine at least once a year. Telemedicine has seen a 1,398% growth between 2014 and 2018. Increasing usage of telemedicine will only increase care access.”
The report also says health savings accounts (HSAs) are viewed as a key health care benefit, but the majority of Americans don’t have one. Of those who do, 33% said it’s through their employer and 31% said it’s an important benefit.
Employee understanding of health care terms has also increased, likely because of the COVID-19 pandemic, according to Lively’s findings. And health care is top-of-mind when planning for future employment. When switching jobs or deciding to stay at a job, health care coverage and salary are the top two concerns Americans say they have.
Meanwhile, many Americans say they are not ready to cover unexpected health care costs for themselves or loved ones, and young Americans are concerned COVID-19 has negatively impacted their financial futures.
“A clear requirement for employers is to address financial concerns head on—it’s in everyone’s best interest,” Lively says. “Financial stress has a direct and real impact on employee productivity. The most important step is to ensure health care benefits bundles address a range of coverage and long-term financial concerns. Employers will come out on top by positioning their existing benefits to better address these concerns. This means introducing savings options like an HSA before health plan selection.”
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