Healthcare accounts not utilized by older adults

Older adults aren’t taking advantage of tax-advantaged saving accounts to prepare for future healthcare expense.

According to a news release, a poll of people age 50 to 80 found that those who do are more likely to have high incomes and education levels, and to be in good health and under the Medicare eligibility age. The poll found that out of the 29 percent of respondents who saved money for healthcare before they needed it, 19 percent used a personal bank account, only 9 percent used flexible spending accounts (FSAs), and 5 percent used health savings accounts (HSAs).

Meanwhile 40 percent of respondents say they have enough funds to pay for health costs without having to save and 27 percent reported they couldn’t afford to save for future health costs.

Having an FSA was more common among respondents aged 50 to 64, those who make more than $100,000, and those with a four-year college degree. Similar trends were seen in HSAs and other tax-advantaged options offered by employers. People who claim their health was fair or poor were less likely to have any of these accounts, according to the release.

The poll also found that 18 percent of the respondents are not at all confident that they’ll have enough money to pay their share of health costs in the next year while 15 percent say they’ve had trouble paying for healthcare in the past year. These worries about affording care led to 13 percent of respondents delaying seeking care and 12 percent didn’t seek care they needed, the release says.

The researchers recommend implementing tax breaks to encourage wise health saving and spending.

“As health insurance plans ask people to pay for more of their health care out of their own pockets, such as through high deductibles, tax-free accounts can help people avoid getting shocked by a sudden health care expense or having to choose between health care and other demands for their dollars,” Jeffrey Kullgren, MD, MPH, MS, associate director of the poll and first author of the new report, says in the release. “But these findings suggest we have a way to go in encouraging the use of these accounts, especially by those most sensitive to out-of-pocket costs because of income or health status.”

They also recommend that patients and providers should speak up about their concerns about affordability of care.

“High medical costs can lead to worse health outcomes for older adults, who may delay care or not properly manage their chronic conditions,” Alison Bryant, PhD, senior vice president of research for AARP, says in the release. “While high deductible health plans paired with an HSA and other savings accounts are a good option for some, they aren’t for everyone – particularly lower income workers who cannot afford to save for future care. AARP believes all Americans should have access to adequate, affordable health care, and that financial assistance should be available to consumers with low incomes to ensure they can get the care they need.”