42% think a three-day hospital stay would cost them less than $1000. Unfortunately, it’s likely to be much higher.
Many adults, according to a recent study commissioned by New York Life Group Benefit Solutions*, underestimate their cost responsibilities under an employer-sponsored health plan.
When asked what they expected their out-of-pocket costs to be for a variety of care services, many of those surveyed estimated their cost responsibilities significantly lower than what they would most likely be.
Given that in 2023, most workers covered by a group medical plan had an out-of-pocket maximum of more than $2,000 for single coverage1 (even higher for family coverage), a majority of employees would find themselves on the hook for a large portion of care costs, until they reach their maximum. And, with 21% of workers covered by an employee-sponsored medical plan with a maximum limit of $6,001 or more1, that puts many at significant financial risk.
These misconceptions may influence an employee’s decisions concerning healthcare and their need for additional coverage, like supplemental health benefits. It could also result in a false sense of readiness to deal with unexpected medical expenses.
The largest disconnect comes from the estimated costs of a three-day hospital stay, which is perceived by most adults to be the most expensive healthcare service. Over 40% of surveyed adults estimated the cost to them would be less than $1,000.
In reality, according to data from Healthcare.gov2, the average cost of a three-day hospital stay is around $30,000. That means, if the hospital stay was the first or only medical service an employee experienced in a given year, it would require them to pay their full out-of-pocket max for that stay. Based on the out-of-pocket max data above, that means a minimum responsibility of $2,000, and for most, probably a lot more.
If the same scenario applies here an employee is accessing a healthcare service and has not met their medical plan’s out-of-pocket max, there’s a significant difference in cost-of-care expectations for a variety of services.
This significant disparity between the estimated and actual employee cost responsibilities for healthcare services may be providing employees with a false sense of security when it comes to covering unexpected medical expenses. This false sense of security may also cause employees to overlook additional supplemental health benefits that provide extra financial security in times of need, because they don’t think they need them.
These findings also underscore the necessity for better education and transparency in healthcare costs, as well as the importance of adequate insurance coverage and preparedness for potential out-of-pocket expenses.
*New York Life Group Benefit Solutions commissioned an online poll between September 29-October 5, 2023 of nearly 2,000 adults employed in the private or government sector. Survey results have a margin of error of plus or minus two percentage points.
1KFF Health News, 2023 Health Benefits Survey,
2Why health insurance is important, HealthCare.gov, viewed December 2023.
3Half of ambulance rides yield surprise medical bills. What's being done to protect people? USA Today, December 13, 2022.
4How Much Does Physical Therapy Cost? Forbes Health, January 24, 2023.
New York Life Group Benefit Solutions products and services are provided by Life Insurance Company of North America, New York Life Group Insurance Company of NY, and New York Life Insurance and Annuity Corporation, subsidiaries of New York Life Insurance Company.
Life Insurance Company of North America is not authorized in NY and does not conduct business in NY.