How Millennials and Gen Z are changing health insurance

With millions of Baby Boomers retiring every year, Millennials and Generation Z dominate the workforce. There are 49.5 million Millennial workers and 17.3 million Gen Zers in the U.S¹. These younger generations have brought many unique and diverse perspectives to how we live and work, and the healthcare market and employers must keep up to meet their expectations.

According to our 2024 Employee Benefits Survey, 92% of employees say health benefits are important. Although Millennials and Gen Zers don’t use a lot of medical care compared to older generations, they want more flexible and alternative healthcare services available—like telemedicine and holistic medicines—instead of traditional options. So, what can the health insurance industry and employers do to meet their needs?

This article will explain how Millennials and Gen Z are changing the healthcare industry and how medical professionals and business owners can better support them.

Takeaways from this blog post:

• Millennials and Generation Z prefer technology-based healthcare solutions like telehealth and mobile apps. Young healthcare consumers also want convenient access to their medical data and more personalized benefits.
• Younger generations continuously push for the destigmatization and integration of mental health into medical care.
• Millennials and Gen Z frequently question traditional healthcare providers and turn to alternative sources for medical information and support, like friends and social media, to improve their health and overall well-being.

1. They want more personalized health benefits

No matter the generation, employees want health benefits. But gone are the days when workers will settle for the one-size-fits-all structure of traditional group health insurance. Younger generations are dissatisfied with the clinical quality of medical care they’ve been receiving². They want more flexibility and control over their healthcare options. Employers can help them achieve this by offering personalized health benefits.

Personalized health benefits empower younger employees to use their benefits as they choose. Instead of relying on traditional employee benefits that work the same for all your employees, your staff can get financial assistance to help them pay for various medical services, including alternative and wellness therapies.

The following are some popular personalized health benefits:

• Health reimbursement arrangements (HRAs): Employers can reimburse employees tax-free for their individual health plan premiums and qualifying out-of-pocket medical expenses with an HRA.
• Health and wellness stipends: Taxable health stipends help employees pay for various out-of-pocket medical costs, like vision and dental coverage. In contrast, wellness stipends are for physical and mental wellness needs other than medical expenses.
• Flexible spending arrangements (FSAs): A medical FSA is a reimbursement plan that allows employees to use pre-tax dollars to cover qualifying out-of-pocket healthcare costs, such as family doctor visits, prescription drugs, and more.
• Health savings accounts (HSAs): HSAs are savings accounts where employers and employees contribute pre-tax money that employees can later use on qualified medical services and items listed in IRS Publication 502.

Offering personalized health benefits not only supports Millennials and Gen Zers' drive for more healthcare options. It also helps business owners attract and retain talented workers, increases engagement and satisfaction, and allows them to stand out as an employer of choice.

2. They use more technology-based options

Baby Boomers and Gen X are used to more traditional ways of receiving healthcare, like booking appointments over the phone and going into a doctor’s office. But, Millennials and Gen Z take a more technology-based approach. This is no surprise. More than 97% of Millennials own a smartphone³, and Gen Z gets more than seven hours of screen time on their mobile devices per day⁴. So, they expect high-quality digital resources from their healthcare providers.

The shifting preference for technology-based solutions is because of convenience—something traditional healthcare lacks. According to the American Hospital Association, more than 70% of younger generations prefer the convenience of telehealth compared to 25% of Baby Boomers. Additionally, 44% of Gen Z and Millennial patients would change doctors if they didn’t have telehealth⁵.

To meet this demand, medical staff must incorporate convenience and self-service into their industry to satisfy these generations of digital natives.

For example, Millennials and Gen Z prefer using technology to book appointments, refill prescriptions, get medication reminders, review lab results, search for health insurance quotes, and even communicate with their physicians. Mobile-friendly apps, texts, email, and other digital tools will likely meet with Millennial and Gen Z approval compared to more traditional methods.

Even though it’ll require some adjustments, this turn to technology-based solutions is good for the healthcare industry. Ultimately, it empowers individuals to control their health and makes accessing care easier and faster than ever.

3. They want instant access to their health data

The rise of technology isn’t just limited to booking appointments. Many Millennials and Gen Zers want a detailed daily look into their health data and trends. Instead of waiting for a doctor's visit to learn their heart rate, insulin levels, blood pressure, and sleep patterns, younger generations want that critical information now. This has led to an increased usage of fitness apps and wearable trackers.

Younger Americans are interested in their health like never before. But they can only know where to make changes if they have the data.

A recent OliverWyman Forum survey found the following:

• That 24% of Gen Z respondents wear a fitness or sleep tracker
• That 18% follow virtual workouts
• That17% record their diet via an app.

Additionally, 44% of Gen Z even said they would share their medical information with a third party for a more detailed view of their health⁶.

Accessing health data at their fingertips allows Millennials and Gen Z to have a complete view of their health without going through the red tape of getting paper medical records. It also allows medical staff to review more comprehensive information about a patient's health and daily life.

4. Mental health is a priority

Anxiety and depression rose among Americans during the COVID-19 pandemic. But some groups were especially vulnerable. Gen Z were 83% more likely to report feeling anxious and 86% more likely to suffer from depression⁷. Millennials, known as the “most anxious generation,” reached out to mental health professionals at higher rates than previous generations.

Gen Z and Millennials don’t see asking for mental health support as a stigma. OliverWyman Forum’s Gen Z Report found that 39% of Gen Zers regularly used in-person or virtual mental health services during the past two years⁷. Millennials frequently advocate for including mental health in society's view of health and well-being.

Both groups drive efforts to speak more openly about mental health and self-care at work, in their communities, and with their friends and families. But they can’t do it alone.

Younger Americans are looking to destigmatize mental health by:

• Increasing comprehensive resources
• Asking traditional providers to hire more mental health professionals who offer convenient assistance
• Improving access to alternative, natural, and holistic care.

With Millennials and Gen Z championing these efforts, the healthcare industry must adjust to enshrine mental health as a critical factor in an individual’s overall physical health.

5. They integrate health and wellness

Millennials and Gen Z think about more than just their basic health. They also integrate wellness techniques into their lifestyles. These techniques include mindfulness, healthy eating, preventive care, and exercise.

“As a doctor who treats both Millennials and Gen Z, I’ve seen key trends in how they approach healthcare,” said Dr. Ralph Waldo, an M.D. in Indiana. “Prevention and holistic wellness are top priorities. I focus on nutrition, exercise, sleep, and stress management tailored to each patient. By giving them tools for self-management and a support system to tap into, younger patients become highly engaged in their health. A mix of high-tech options, transparency, and patient empowerment is key to providing good care for Millennials and Gen Z.”

Employers can support their younger workers’ needs to integrate health and wellness by creating a workplace wellness program. Millennials and Gen Zers have seen chronic illnesses and other serious health issues grip their parents in recent years. By prioritizing wellness and preventive healthcare, younger individuals are less likely to experience severe health conditions later in life. A wellness program is also a good way for employers to improve their company culture, increase productivity, and show they care about their employees’ values.

This drive toward wellness also impacts other industries. Millennials and Gen Zers are more interested in buying services and products that are sustainable and ethically sourced. By preferring organic, cruelty-free food that prioritizes global environmental health, younger generations can improve their well-being while supporting the health and longevity of future generations.

6. They’re more likely to question their doctor

Traditional healthcare providers haven’t impressed younger Americans. According to a MITRE-Harris poll, 52% of patients said their doctor dismissed their symptoms or medical concerns⁸. Timely service, inefficient medical procedures, and cost transparency issues can also be undesirable. That’s why younger generations are reaching out to friends and the internet to confirm their diagnoses after a doctor’s appointment.

One-third of Gen Z and more than 25% of Millennials go on social media for guidance when dealing with chronic health conditions and other medical issues⁹. With the increased online access to medical content, it’s easy to see why individuals reach out to “Dr. Google” when trying to understand their symptoms. When they book an appointment, 29% of Gen Z and 32% of Millennials ask their doctor for a prescription drug that they saw online.

While the internet may be an easy and fast resource, healthcare organizations worry if their patients are receiving accurate medical information from trustworthy sources. Some clinicians and other medical professionals have joined various social media platforms, like TikTok and Instagram, to produce informative and accurate content on a variety of topics.

Using this method, physicians can ensure Gen Zers and Millennials understand certain medical conditions correctly. It also improves the visibility and exposure of healthcare providers that younger patients may not have known were available in their area.

Conclusion

Millennials will soon make up the largest segment of the American workforce, and Gen Z isn’t far behind. If healthcare professionals and employers want to continue marketing to these demographics successfully, they must offer more integrated, mindful, and personalized options to entice them. By understanding the unique needs and wants of Millennials and Gen Zers, we can reinvigorate the healthcare industry and have a happier and healthier nation.

Offering personalized health benefits to employees of all generations doesn’t have to be complicated. PeopleKeep’s HRA administration software makes it easy to provide affordable, tax-advantaged health benefits that won’t break the bank. Contact us today to learn how we can help you offer a customized HRA that your Millennial and Gen Z employees will love.

1. https://www.employerflexible.com/insights/harnessing-the-diversity-of-5-generations-in-your-workplace/

2. https://www.accenture.com/us-en/insights/health/todays-consumers-reveal-future-healthcare

3. https://www.pewresearch.org/internet/fact-sheet/mobile/

4. https://www.latimes.com/entertainment-arts/business/newsletter/2022-04-12/gen-z-spends-half-its-waking-hours-on-screen-time-heres-the-good-and-bad-news-for-hollywood-the-wide-shot

5. https://www.aha.org/aha-center-health-innovation-market-scan/2021-06-29-there-may-be-generation-gap-telehealths-future

6. https://www.weforum.org/agenda/2023/09/how-gen-z-are-reshaping-the-healthcare-industry/

7. https://www.oliverwymanforum.com/gen-z/2023/sep/how-gen-zers-are-reshaping-the-healthcare-industry.html

8. https://www.mitre.org/news-insights/news-release/mitre-harris-poll-many-patients-feel-ignored-or-doubted

9. https://www.mmm-online.com/home/channel/gen-z-millennials-turn-to-tiktok-instead-of-doctors-for-health-advice-heres-what-that-looks-like/