Addressing Unmet Health Care Needs Through Insurance Benefit Design: Challenges and Opportunities

Public programs have increasingly sought to address health-related social needs that create barriers to care and health disparities and drive health care costs. For instance, several state Medicaid programs now cover medically tailored meals, housing supports, and non-emergency transportation through managed care and demonstration waivers. Medicare Advantage plans can also offer supplemental benefits like home-delivered meals or in-home supports for beneficiaries with chronic conditions. Now, the American Academy of Actuaries’ Health Equity Committee is exploring ways to help address health disparities and unmet needs through better health insurance benefit design.

Health actuaries are involved in developing and implementing benefit design features and are often relied on to project benefit costs and the resulting premium calculations. To learn more about the opportunities and challenges related to incorporating benefits that could help address unmet health needs, the committee’s first step was to engage a variety of experts and decision makers—including human resources benefit directors, medical directors, benefit consultants, as well as actuaries.

Using Benefit Design to Reduce Barriers to Care: Initial Takeaways

The health equity committee focused specifically on benefits in the employer-sponsored insurance market, the dominant source of health insurance coverage for Americans younger than 65. Employers can be more flexible than insurers in the individual market because they can consider broader impacts, such as turnover and productivity, when designing benefits. When employers design health benefits, they consider applicable regulatory requirements, the cost of coverage (including administration), and the benefits of coverage (such as employee retention and productivity).

Insights from a series of workshops and a symposium highlighted the challenges and opportunities of using benefit design to help reduce inequities and barriers to care. These are particularly relevant for state policymakers who regulate commercial plans or who operate their own Medicaid, ACA exchange, and/or state employee benefit plan. The committee identified several opportunities, including the following:

• Unmet health care needs can occur across various groups and in all insurance markets. They are not limited to the Medicaid population or those with low-to-moderate incomes.
• Although imperfect, sufficient information is available to guide the incorporation of benefit design features to address unmet health care needs. Employers and insurers increasingly use information from claims data, enrollment data, and employee surveys to identify needs and develop benefits to meet them.
• Listening to groups of employees to understand their experiences and priorities can facilitate bottom-up rather than top-down approaches.
• Building trust among at-risk populations is essential to enabling data collection regarding health-related social needs, health care utilization, and unmet medical needs and to supporting outreach efforts. To help establish trust, plan participants must be told how the data they provide will—and will not—be used and must feel confident that it will help improve health care access and outcomes for them and their communities.
• Pressure to identify offsetting cost savings can hinder the adoption of benefits that address unmet needs, especially when short-term costs exceed immediate savings. Return on investment (ROI), a key metric for assessing new initiatives, often overlooks improvements in health outcomes, employee satisfaction, or other effects that are difficult to quantify.
• Statutory and regulatory requirements may inhibit benefit design innovations. For instance, ambiguous ERISA and privacy rules can discourage data sharing among self-insured employers, plan administrators, and specialized health and wellness vendors. Information sharing could help identify unmet needs and improve health care access and outcomes.

Ultimately, the success and sustainability of efforts to reduce disparities and address unmet health needs require cooperation among multiple stakeholders and a commitment to systemic change.

Next Steps: Thinking Beyond Short-Term Cost Savings

A key challenge we identified was the need to show that a new benefit or initiative will be paid for through reduced health spending in the near term (usually one year or the term of a typical plan). For example, to add coverage for doula services, the cost of these services would need to result in an offsetting reduction in maternity and newborn care costs.

Often, design considerations do not consider how a new benefit or initiative could improve health or result in other financial or non-financial benefits, such as improved productivity, employee satisfaction, or retention. As a result, narrowly focused ROI measures can be biased against benefits that increase short-term health care costs, regardless of their impact on medical and non-medical outcomes and long-term costs. However, a broader definition of benefit may be in the interest of large purchasers such as employers.

The committee is now in the next stage of its work—to broaden the focus of new benefit or initiative evaluations conducted by health actuaries for private and public health plans to include other measures of benefit, such as improved health or improved productivity, employee satisfaction, or retention. A holistic view of the cost and benefit of new programs can be considered by incorporating indirect costs and savings, as well as non-financial outcomes. This broader perspective can help decision makers use health care resources more efficiently. 

In particular, the committee is working to create a framework that actuaries and other stakeholders can use when evaluating a new health care benefit or initiative. The framework is being developed with input from actuarial and non-actuarial experts and is intended to serve as a guide to possible indirect costs, indirect savings, and non-financial outcomes that might be considered when estimating the value of a program.  

We aim to provide a resource in spring 2026 that can assist health plans and employers in developing benefit design changes that lead to more efficient use of health care resources. The framework can also be valuable to federal and state legislators and regulators, in terms of insights it can provide for commercial insurance oversight, public health insurance programs, and government employee health benefit design.  

Considerations for State Policymakers

State policymakers and regulators have important roles in addressing health disparities and unmet social and medical needs through benefit design.

Data sharing and value-based evaluation. Some state Medicaid agencies with programs to help address health-related social needs are developing high-level dashboards that track utilization and costs and are engaging research partners to analyze underlying claims and encounter-level data to inform the design of Medicaid benefits. These efforts allow states to assess changes in utilization, costs, and outcomes for participating members. Broader release of de-identified claims data linked with health-related social needs data could further this work and help determine whether such initiatives are advancing health equity and delivering value, allowing public and private plans to learn from state experience.

Likewise, when states consider new health-related social needs programs or benefit mandates, the emphasis should be on value, that is, whether a service or set of services measurably improves health outcomes or helps address unmet needs. Prioritizing programs or benefit mandates that expand access to high-value, evidence-based services may be able to promote equity without imposing unnecessary costs. These evaluations need to be publicly available both for public accountability and decision making as well as for the benefit of populations covered by commercial plans with similar needs.

Commercial plan regulation. As states expand oversight of insurers’ use of external data and predictive models, it will be important to preserve flexibility so that insurers can tailor benefits and interventions to higher-need populations. For example, an absolute ban on using characteristics such as race, ethnicity, or sex could make it more difficult for insurers to identify disparities or to target interventions (e.g., enhanced care management, transportation benefits) to groups that historically experience higher barriers to care and to measure progress toward equity goals.

Aligning Benefit Decision with Long-Term Health and Well-Being

Addressing unmet health care needs requires new benefit-related initiatives and ways to evaluate their value. By broadening how costs and outcomes are measured, actuaries, employers, and policymakers can better align benefit decisions with the long-term health and well-being of the populations they serve. Doing so requires collaboration and research to ensure that innovation is supported by evidence and guided by a comprehensive understanding of value. With thoughtful oversight and improved evaluation frameworks, benefit design can become a practical lever for reducing disparities, improving population health, and ensuring that health care dollars are spent where they deliver the greatest impact.