
Employers and insurers must assess their health benefit plans to ensure equal actuarial value and address gender disparities. Employed women pay more out-of-pocket and receive inadequate coverage, leading to a $15.4 billion annual gap compared to men. Barriers include systemic discrimination, cost-centric approaches, and limited provider diversity. Policy improvements and employer actions can narrow this gap, emphasizing the importance of achieving health equity in benefit plans today.
To ensure health equity for all members, it is essential for employers and health insurers to evaluate the design of their benefit plans, ensuring equal actuarial value. Despite progress in promoting health equity in the healthcare system, there are disparities where women pay more and receive less from employer-sponsored health benefits compared to men.
A Deloitte study revealed that employed women are more likely to reach their out-of-pocket maximums and less likely to receive adequate coverage for their healthcare needs. This imbalance results in women paying approximately $15.4 billion more annually in out-of-pocket healthcare costs than men.
In a healthcare system moving towards value-based care, addressing this disparity is crucial. In a discussion with Healthcare Strategies, the study’s authors, Andy Davis and Marielle Farina, explained the study’s findings and discussed actions employers can take.
Challenges in Achieving Health Benefits Equity
Employers have a unique role in addressing benefit equity, but many are hesitant for various reasons. Some fear appearing paternalistic or favoring specific employee groups. Acquiring data to track results and assess population-level needs can also be challenging.
Systemic discrimination, better benefits for higher-paid employees, assumptions of homogeneity, and in-group biases are additional barriers contributing to health benefits inequities. A cost-centered mindset, where employers view benefits as a cost to be managed, exacerbates disparities, particularly for low-wage employees.
Benefit designs that do not align cost-sharing with wages and the prevalence of high-deductible health plans further compound the problem. Additionally, limited diversity among in-network providers sustains inequitable outcomes.
**The State of Health Benefits Equity**
To assess health benefits equity in employer-sponsored plans in the United States, Deloitte researchers analyzed data covering 16 million lives, evaluating medical claims from 2021. The evidence indicated that women, on average, pay more out-of-pocket than men across all age groups. Employed women spend up to $15.4 billion more annually in out-of-pocket healthcare costs under an average benefits design.
Moreover, the actuarial value of benefits for employed women (excluding maternal healthcare costs) is lower than that for men, resulting in a $1.3 billion gap.
Maternity care costs contribute only two percent to this disparity. Mental healthcare utilization, diagnostic tests, screenings, and higher emergency department costs for women are key drivers of the gender-based cost difference.
Policy Efforts to Address Imbalance
The Affordable Care Act (ACA) aimed to reduce uninsurance and enhance coverage affordability, but it couldn’t fully address benefits equity due to insufficient data. Future policy improvements could include broader coverage for diagnostic work, especially for services primarily affecting women.
Steps for Payers to Improve Health Benefits Equity
Addressing this issue is feasible and may cost as little as $12 per employee annually for employers. Employers must acknowledge their responsibility for health benefit equity alongside health insurers. Identifying disparities in current benefit designs, understanding where women face higher out-of-pocket costs, and determining the necessary investments are crucial steps.
Payers should also consider members’ out-of-pocket expenditures and the products they select. Understanding employees’ needs and motivations is essential for facilitating better health equity in benefits.
Effective communication of changes to plan members is equally important, ensuring they understand not only the new benefits but also why these changes were necessary.
Achieving equity in health benefits for women and underserved populations is attainable, and employers can begin working toward this goal immediately.
In conclusion, health equity is a pressing concern, and employers have the opportunity to make a difference in health benefits design now, rather than waiting for years.