Closing the cost gap: Strategies to advance women’s health equity has been saved
Analysis
Closing the cost gap: Strategies to advance women’s health equity
Rethinking benefit coverage and affordability
Out-of-pocket health care costs for employed women in the United States are estimated to be $15 billion higher per year than for employed men, exacerbating gender wage disparities. And this financial burden on women persists even when excluding maternity-related services. How can businesses and health insurers help close the cost gap and address gender bias in health care?
Being female shouldn’t have hidden costs
Our analysis reveals that women across all age groups from 19 to 64 experience disproportionately higher out-of-pocket medical expenses compared to men, even when excluding pregnancy-related services. On average, female employees under single coverage incur approximately $266 more in annual out-of-pocket costs than their male counterparts, constituting over an 18% increase, excluding pregnancy-related expenses. This gender-based financial challenge highlights the need for businesses to scrutinize benefit coverage to make health care more affordable for female employees.
Deloitte’s health actuarial team has delved into the average benefit design’s consequences on women’s financial outlays when accessing health care services. Our findings suggest that health insurance products may inadvertently create an income gap for working women, compounding the effects of the well-documented gender wage disparity, where women earn approximately $0.82 for every dollar earned by men. For Black and Latinx women, this income gap is even wider at $0.70 and $0.65, respectively, compared to White men. This dual burden of elevated health care expenditures and the gender wage gap may force employed women into difficult choices between necessary care and affordability.
Looking for a deeper dive into gender bias in health care costs and how your business can advance women’s health equity? Download our full report for the details and data of our analysis.
Hiding in plain sight: The health care gender toll
What could be the solution?
As gender-based financial disparities become increasingly evident, it’s important for health insurers and employers to reevaluate and redesign benefit coverage. This proactive approach can not only alleviate the financial strain on women but also foster equity within organizations, ultimately contributing to optimal health and well-being for all genders. Just as the “pink tax” highlights price discrepancies in consumer products, the health care sector and employers should address these inequities to help ensure a fair and accessible health care system for everyone.
We have identified some proactive measures that health care insurers can undertake to help enhance financial well-being. This, in turn, could foster improvements in physical health and overall well-being:
- Perform the analysis on your own members and benefits—understand the unique and universal needs of your membership based on demographic and health needs.
- Modify and update benefits for all members—cost-sharing design should be tailored to the needs of your membership to help advance financial and health equity.
- Work with health care providers to understand how to reduce the financial burden for identified benefits and services.
- Create a communication plan for your plan sponsors, sales agents, and brokers on why this investment can have a positive impact.
- Continuously monitor the intended and potentially unintended consequences of your benefit and coverage design with an eye toward creating financial equity.
- While there are some limitations on the agency that health insurers have on benefits, such as the rules regulating benefits for high-deductible health plans, work to create change that can enable more fair and equitable products and out-of-pocket expenditures across all genders.
Organizations that offer or support the coverage of an individual should be evaluating the equity of out-of-pocket expenditures. Business leaders and employers can consider taking the following actions to help advance health and well-being:
- Examine benefit coverage (premiums and out-of-pocket expenditures together) as it applies to the needs of men, women, and nonbinary individuals in your workforce. Understand the financial and accessibility impact of the choices based on sex and gender.
- Work with your health insurance carrier(s) to understand how benefits could be modified and revised to help close any gaps or disparities in financial or health outcomes.
- Create a process and communication plan to drive adoption and enrollment for benefit coverage that represents the broad range of needs across population cohorts in your workforce.
- Evaluate the trade-offs of making this an investment in your employees. Organizations could embrace this move as a way to drive equity and purpose in the organization.
Through our analysis, we were able to identify key data points important to the health benefits gap story. Explore a visual breakdown of them in this infographic, also included in our download of the report.
Making better health and well-being more accessible to all
There may be a strong link between income and health and well-being. Our analysis highlights a challenge and opportunity for US women who are facing disproportionate out-of-pocket health care costs in comparison to men. Health care and business leaders have a real opportunity to create meaningful change for their workforce. Based on the data on medical costs for women, we recommend an intentional review of benefit design coverage with focused analysis of impact on men, women, and individuals of any gender.
If you’d like to talk about any of the insights on this page, or how your company can help advance health equity, let’s set up a conversation.
Get in touch
Kulleni Gebreyes, MD, MBA |
Andy Davis, FSA, MAAA |
|
|||
Thuong Broaden, ASA, MAAA, FCA |
Stefani (Klapperich) Smilanich, ASA |
Marielle Farina, FSA, MAAA |
Recommendations
The Deloitte Health Equity Institute
Learn how the Deloitte Health Equity Institute is translating purpose into action to advance health equity.
Health Equity through Analytics (HExA): Literacy and numeracy
The ABC’s of education and health outcomes
