Children, COVID-19 Are Drivers of Household Healthcare Spending

Households that had a COVID-19 diagnosis and those with children had higher rates of household healthcare spending and medical bill concerns, according to the 2021 Aflac Health Care Issues Survey. 

The online survey consisted of responses from a little more than 1,000 adults across the country.

Almost half of all households experienced out-of-pocket healthcare costs in the past year, the results revealed. Nearly 50 percent had costs under $500, while 30 percent experienced costs between $500 and $1,500, and 17 percent had more than $1,500 in out-of-pocket expenses.

Households that had a member diagnosed with COVID-19 during the last 12 months were more likely to experience high healthcare costs compared to households without a COVID-19 diagnosis, the survey found.

Nearly two-thirds of households that had a COVID-19 diagnosis dealt with out-of-pocket healthcare costs, with 23 percent experiencing expenses of $1,500 or more.

Compared to households without COVID-19, these households were twice as likely to cancel events, borrow money from a family member or friend, and delay visiting the doctor for themselves or a family member as a result of cost concerns.

Additionally, households with a COVID-19 diagnosis were three times as likely to file for or declare bankruptcy and withdraw money from retirement funds.

Households with children also experienced higher rates of medical bill concerns compared to households without children (51 percent versus 34 percent). They were twice as likely to pick up additional hours or shifts at work, take money from retirement savings, and file for or declare bankruptcy.

As the holidays approach, high healthcare expenses are causing families to rethink their spending habits.

Four in ten households that experienced a COVID-19 diagnosis reported that they planned to cut back on holiday spending for gifts and decorations and intended to cancel their plans to visit family and friends for the holidays.

On the other hand, parents are more likely to sacrifice other things in order to preserve holiday activities with their children. For example, 41 percent of parents reported that they will pick up extra hours or shifts at work to cover the holiday expenses. Compared to other households, households with children were less likely to forgo holiday events or cut back on their holiday spending.

“The study paints a picture of resourcefulness and sacrifice with certain households reporting that they had to take extra shifts at work, dip into their 401(k) accounts, and even delay medical treatment for themselves,” Jeramy Tipton, senior vice president of distribution expansion and consumer markets at Aflac, said in a press release.

“We also found that households with health insurance are not immune from having to cope with significant out-of-pocket healthcare expenses.”

The study results revealed that 51 percent of households that had health insurance reported having out-of-pocket medical costs. Nearly 20 percent of these households experienced expenses of $1,500 or more.

Out-of-pocket healthcare costs remain a common hurdle for both insured and uninsured Americans of all ages.

A recent MedicareGuide.com survey revealed that over a third of seniors spent more than $1,000 on out-of-pocket healthcare services during a one-year period. Additionally, nearly 30 percent reported that they would tap into retirement or non-retirement savings to pay for major healthcare services.

A separate survey from the Harris Poll and the not-for-profit organization MITRE found that Medicare beneficiaries and individuals on employer-sponsored health plans alike faced medical bill concerns, though the latter experienced higher rates of unexpected medical bills.

Low health literacy and a lack of understanding about health plans can exacerbate medical bill concerns and high healthcare expenses, the study also revealed.

According to Aflac, supplemental benefits may help reduce healthcare expenses by offering coverage for costs that health plans may not cover.