SAN MATEO, CA – February 26, 2007 – (BUSINESS WIRE) To cope with rising health care costs, even working Americans with health insurance are deferring medical visits and cutting back on prescriptions, according to a new study commissioned by WageWorks. Although working Americans are largely accepting of higher medical costs as inevitable, few are prepared for them.

Among the survey’s most dramatic findings is the fact that insured Americans are behaving just like the uninsured, when it comes to rising health care costs. In response to higher deductibles, bigger co-payments and more restrictive coverage, more than half of survey respondents who have employer-sponsored health insurance have delayed a medical or dental visit in the last year. Furthermore, 22 percent report that they have cut back on prescription medicine.

“With so much industry and legislative focus on reducing the number of uninsured, we wanted to understand what is happening to those who already have insurance. It turns out they’re adopting the tactics long used by those with less access to care,” said Jon Kessler, chairman of WageWorks. “The health care challenge is spreading to the middle class. Higher costs and slower wage growth, also in part due to health care, mean even fairly affluent families have to make tough choices.”

More than 71 percent of insured Americans surveyed say that they are concerned about out-of-pocket health care costs such as medication, co-pays, insurance plan deductibles and lab fees. A majority of respondents attribute rising costs to health insurance companies (55 percent), while a significant number also cited employers scaling back on health benefits (43 percent) and general rising costs (40 percent).

AMERICANS EXPECT INCREASED COSTS…
Sixty percent of those who get insurance at work expect to get less in the future. Over the next three to five years, nearly one third of respondents percent expect their employer’s contribution to health insurance will be cut in half, while 24 percent expect their employer to replace conventional insurance with high-deductible plans.

When asked about who will be most responsible for keeping health care spending as low as possible, 44 percent believed it would be their individual responsibility. Half as many said their employer or health insurance company would be most responsible.

…BUT NOT PREPARED TO HANDLE THEM
Despite their general acceptance of greater responsibility for their own health care costs, few Americans are prepared to do so. Nearly 60 percent of respondents revealed that they are not prepared to handle the expense of an unexpected medical issue. Almost one-third admit that they would need to borrow money, while another 28 percent confess they simply have no idea how they would pay for an unexpected medical event. In addition:

• Seventy-five percent of insured respondents have no form of savings account that they use for unexpected expenses, including health care.
• Just 16 percent use a flexible spending account (FSA), which allow employees and their employers to set aside pre-tax wages at the beginning of the year to pay for certain out-of-pocket expenses. More than 60 percent are aware of FSAs but don’t have one.
• Almost as many respondents are aware of health savings accounts, which function similar to FSAs but are linked with a high-deductible health plan. Yet even fewer – just 8 percent – use an HSA.

CLOSING THE GAP
There are steps that can be taken to help narrow the awareness and preparedness gap.

“Similar to the transition from traditional pensions to 401(K)s, there is a learning process involved with taking more ownership and control of your health care. First and foremost, working Americans need to begin educating themselves and getting involved in consumer-directed health care products,” said Kessler.

“While working families will start finding the time to educate themselves, employers and benefits administrators need to do a better job of reaching out to employees with the information they need to navigate this maze,” continued Kessler. “American businesses can help by encouraging participation in FSAs and HSAs. As more employees take an active role in managing health care spending, fewer will feel burdened or concerned by the rising costs.”

According to Kessler, “The government needs to act as well, by taking constructive steps toward affordable health care. There are simple steps that would help, such as eliminating the differences between HSAs and FSAs that unintentionally encourage employers to offer less health coverage, or closing loopholes that allow employers to look the other way if HSAs are used for non-medical purposes.”

About the survey
This survey was conducted by Kelton Research between March 23 and March 28, 2007 using an e-mail invitation and an online survey. Quotas are set to ensure reliable and accurate representation of the total U.S. population age 26-65 who receive health insurance through their or their spouse’s employer.

Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results.

In this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 4.4 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.

About WageWorks
Founded in 2000, WageWorks provides tax-advantaged health, wellness, child care, commuting, and education benefits. More than 100 of America's Fortune 500 employers and millions of their benefits-eligible employees use WageWorks' programs. As the cost of living continues to rise and more health care costs are pushed to employees, WageWorks seeks to eliminate barriers to benefit participation so working families can save money and improve their overall well-being.

WageWorks provides easy-to-use benefits programs that help save time, and educational tools and resources to increase employees' knowledge and understanding of their family's health care and financial needs.

WageWorks is headquartered in San Mateo, CA., with offices in New York, Chicago, Washington, D.C., Phoenix, Ariz., Mequon, WI., and Troy, MI. For more information, please visit www.wageworks.com.