Cathie Ramey
RedwoodAge.com

As they approach retirement, fewer than half of baby boomers think they'll be able to pay for healthcare, according to a national study by a leading insurer.

The survey by Guardian Life suggests the lack of confidence stems from a general lack of knowledge about health insurance. It also found two out of three employees have trouble understanding their own coverage plans.

Guardian vice president Tim Bireley said it isn't enough for employers to provide brochures. "We have to make sure that employees are fully absorbing information," he said. "We have to consistently surround the consumer and share information with them at several touch points until they have a solid understanding of their healthcare benefits."

That may be easier said than done. As Birely noted, a previous study showed "employees spend less time reviewing their benefits than they do holiday shopping."

It isn't hard to understand why workers would rather go shopping if they don't fully understand some of the basic health care alphabet such as FSA (flexible spending account), HSA (health savings account) and  HRAs (health reimbursement accounts).

For some, the concepts are overwhelming, particularly when it concerns the future instead of the present. The gap in understanding is also divided by education, gender and geography.

Comparing men to women,  the survey found 51 percent of women  have done some retirement healthcare planning as opposed to 42 percent of men. One reason for the difference may be that more women find a greater challenge in paying for healthcare costs than men.

In addition to gender, the cost of healthcare insurance was described as substantial or great challenge for 65 percent of those without a college education compared to 40 percent of those with a college degree.

By area,  nearly 60 percent of those living in the North Central and Southern regions of the US found paying for healthcare as a big challenge compared to 40 percent of those in the West.

Confusion and Anxiety
Confusion regarding the choices that must be made for a secure retirement is a common theme voiced by older boomers. Unknowns such as longevity, disability, the solvency of Medicare and Social Security, and spiraling healthcare costs compound the problem. 

Boomers consistently report being anxious about the amount of money needed to retire comfortably although many aren't saving for retirement.  Add to this the fact that they're not planning for healthcare costs in retirement and you have the makings of a perfect storm.

When asked, 28 percent of  those surveyed pointed to the profits of drug companies as being the primary reason for healthcare costs, double the number who blamed lawsuits against physicians (14 percent).   

Poor health, obesity, aging and smoking were cited by one-third of  employees who recognize their own behavior as a key factor in the mounting cost of healthcare. Survey participants felt taking more control over their health would result in lowering medical expenses.

While genes do play a role, researchers believe that lifestyle choices may account for 70 percent of health and wellness outcomes in later life.  For today's boomers who choose to smoke, are overweight, and don't exercise, the outlook may be grim.

Wellness Education
In an effort to help employees build healthier and happier lives, employers are offering wellness programs.  

Larger companies may even have on-site gyms. Smaller companies may focus on educational programs or offer discounts on gym memberships.

The effectiveness of wellness programs is confirmed by two-thirds of all employees; 85 percent of those enrolled say the programs are very effective in promoting good health.

"There is no panacea for some of the challenges that we face, but educating and empowering employees, particularly at smaller companies, is critical to the success of our healthcare system," said Kerri Mansberg of Guardian's Group Medical.  According to the Department of Commerce, small firms [1-500 employees] represent more than 99% of  all employer firms and employ about half of the private sector workforce. It is time for health plans to cater to this vital market."