A new ranking reveals which states would benefit most from a Flexible Savings Account (FSA) as a work perk, based on residents’ reluctance to visit a doctor due to the cost.
The findings, pulled together by personal finance experts Wealth of Geeks, analyzed the latest data from the CDC’s Behavioral Risk Factor Surveillance System to determine which states have the highest proportion of residents who avoid seeking care due to cost concerns.
A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows employees to set aside a portion of their pre-tax earnings – up to $3,050 annually in 2023 – to pay for qualifying out-of-pocket healthcare and care expenses.
An FSA can help workers pay for all doctor visits and consults, as well as surgery and other medical procedures, prescription medications, and select services. This will prove indispensable for those who would otherwise avoid healthcare providers to save money.
On a nationwide scale, almost 1 in 10 Americans (9.3%) reported needing to see a doctor over the last 12 months but avoiding doing so due to concerns about the cost.
The state that would benefit the most from access to an FSA is Texas, as it has the highest proportion of people avoiding care at 14.4% – 54% higher than the national average (9.3%).
Following behind Texas as the state that most avoids seeking care is Nevada, as 13.3% of people report putting off seeing a doctor over the last year, while Oklahoma rounds out the top three states most in need of healthcare reimbursements, with 12.6% avoiding care.
On the other end of the scale, the place that is least likely to forgo seeing a medical professional is Vermont, as just 5.1% of residents avoid seeking care – but this still means that around 32.9k people in the state aren’t getting the medical attention they need.
The ten states that most avoid seeking medical care due to cost
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It’s no surprise that so many people have to choose between their health and their income, as the US is the highest-spending country worldwide regarding healthcare, at $12,318 per capita in 2021, according to the World Economic Forum (WEF).
However, the US is still behind when it comes to health insurance. At the same time, Americans are subject to higher spending due to things like overutilization of services, which drives up costs, high prescription drug prices, and increased costs due to privatization.
According to Michael Dinich, personal finance expert and founder of Wealth of Geeks, workers with residual dollars left in their FSA should use it to address any medical concerns they’ve been putting off getting checked out before they forfeit their funds.
For many workers, the date to use up their remaining balance is fast approaching, as most FSA plans expire at the end of the year – remaining any unused funds will be lost. This is because, as with other employment benefits, an FSA is subject to a ‘use-it-or-lose-it’ rule.
And plenty of Americans should be able to do so, as the latest figures from the Employee Benefit Research Institute (EBRI) found that two-fifths (40%) of workers forfeit at least part of their FSA contributions, with the average person losing between $339 and $408 annually.
Michael says: “As we near the date at which your FSA balance is reset, it’s vital to start considering how you can use up your remaining funds to benefit fully from the tax-advantaged work benefit – especially if you’ve been putting off making a purchase.
“If you’re somebody who avoids seeking medical care to curb costs, now is the perfect time to utilize your funds and reduce the pressure on next year’s balance – especially if you’re in a state with particularly high consultation or treatment fees.”
Finally, Americans may want to stock up on their prescriptions before the deadline hits, as the Agency for Healthcare Research and Quality found that the annual prescription spend was as high as $1,142 per capita in 2021 – with 22% of expenses paid out of pocket.
But before rushing to burn through your remaining balance, Wealth of Geeks’ Michael Dinich reminds workers to check the small print of their plan to ensure their purchases are eligible.
He says: “It’s important to double-check what your plan covers before spending your residual allowance; otherwise, you may be caught short before Christmas. Review the guidelines provided by your administrator to determine what is covered and consult your provider’s website or enrollment documents for clarification.”
Data is gathered from the Centers for Disease Control Behavioural Risk Factor Surveillance System, the Employee Benefit Research Institute (EBRI), and the World Economic Forum.
About Michael Dinich
Michael Dinich has worked in personal finance for over 20 years, helping families reduce taxes, increase their income, and save for retirement. Before starting Wealth of Geeks, he worked as an advisor in the financial service industry, helping retirees and soon-to-be retirees with retirement income planning.
Full state ranking
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