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Why Younger Generations Are Shying Away From Health Insurance

Why Younger Generations Are Shying Away From Health Insurance

December 5, 2023

Published by Broker World

As Americans continue to live longer and lead more active lives, the workforce has evolved to cover five generations: Traditionalists, baby boomers, Gen X, millennials and Generation Z, the most substantial generation gap in history. Understandably, each of these generations has unique preferences and requirements when it comes to healthcare coverage. One of the current concerns in the insurance industry is getting younger clients to think about and buy coverage. For many individuals who belong to younger generations, this might be their first time buying insurance. An equal concern is a lack of employment within our industry from these generations. We work in a noble, purposeful industry. Collectively, we need to do a better job recruiting into these generations. More employees from the millennial and Gen Z generations would make it easier to provide a better experience for those like employers and employees we serve.

According to one report, nearly a third of Gen Z employees said they did not understand the concept of open enrollment, highlighting the need for clear and accessible information. Brokers must approach younger generations with plans tailored to their specific needs and provide them with the guidance they require to make informed decisions. This article will outline the distinct needs of the two youngest workforce generations. By understanding the generational context and identifying their particular coverage needs, brokers can gain a deeper understanding and establish stronger connections with existing and potential clients.

Understanding each generation’s unique needs
Millennials: Who They Are

Today, millennials make up the largest demographic covered by employer health plans. A recent Health Action Council (HAC) study1 looked at the primary reasons adults in their late twenties to early forties access healthcare compared to other generations. Millennials, born between 1981 and 1996, are entering the prime years for starting families, with pregnancy emerging as the leading factor driving their healthcare expenses. The study revealed the cost of pregnancy for millennials is currently 14 percent higher than that for the succeeding generation, Gen Z. Contributing factors to these costs include fertility treatments, high-risk pregnancies and C-section deliveries.

Growing up during the Great Recession also significantly impacted this generation, motivating them to be discerning shoppers and search for the best deals, even when it comes to health insurance. Millennials are also known for their reliance on technology, which influences how they approach healthcare. Being the father of two millennial children, it is obvious how dependent and comfortable they are with technology, not just in healthcare but in all aspects of their social interactions. This generation tends to research health conditions proactively, often turning to the internet for information. They also prefer urgent care facilities over traditional doctor-patient relationships, making them more likely to seek immediate, convenient medical assistance when necessary. Understanding their likeliness to use technology and their healthcare preferences gives us a tremendous opportunity to connect them to a much better experience.

What you can do:

Brokers can help meet the needs of tech-savvy millennials by ensuring their coverage includes virtual visit options. One of the key advantages of telehealth is its convenience. Through virtual consultations, employees can access medical support from anywhere and easily schedule appointments that fit their busy schedules. Telehealth services are also cost effective. By reducing the need for in-person visits, telehealth can help lower healthcare costs for employers. It may also mean reduced out-of-pocket costs for employees, making healthcare more accessible and affordable.

Furthermore, affordability plays a significant role in how millennials pick their coverage. One study found more than half of millennials chose their health insurance plan solely based on the cost.2 They also tend to have lower brand loyalty and are open to changing plans if it means saving money. However, this generation often lacks confidence in understanding the specifics of their plans, such as Flexible Spending Accounts (FSAs) and Health Spending Accounts (HSAs), creating an opportunity for brokers and employers to provide better education to employees.

Gen Z: Who They Are

Gen Z, the youngest workforce generation, covers a wide age range. Born between 1997 and 2012, its oldest members manage mortgages, while the youngest are still preteens. Like all generations, the world events around them helped shape their identity. The oldest Gen Zers were born when the internet was just gaining popularity and grew up using it as part of their daily lives. Like millennials, Gen Z leans toward telehealth visits over an in-person doctor’s appointment.

This generation also faced recent challenges like pandemic lockdowns, economic uncertainties, and the looming climate crisis. A recent McKinsey study shows that Gen Z is experiencing a behavioral health crisis.3 The results revealed that this generation has the highest rate of mental illness and the least optimistic outlook compared to other generations. The report revealed one in four Gen Z respondents said they felt emotionally distressed, nearly double the levels reported by millennials. As the father of a Gen Z child as well, I can attest that their challenges are real, and the impact of the pandemic is real and much different than on the millennial generation. Mental and behavioral health coverages have become more important to clients with higher levels of Gen Z employees.

What you can do:

When discussing coverage with clients, brokers should ensure they are informed about Employee Assistance Programs (EAPs) that might be included in their plans. Additionally, brokers must guarantee clients are adequately prepared to explain these programs to their younger employees, especially if it is their first time buying insurance. EAPs are voluntary benefits programs designed to help employees facing personal challenges that impact their job performance, health, and mental well-being. Third parties usually provide these services at no additional cost to employees. Unfortunately, many people are unaware this tool is included in their plans, despite 98 percent of mid to large companies in the U.S. offering EAPs.

Given their reputation for extensive screen time, Gen Z employees are also more likely to enroll in a vision benefits plan than previous generations. As they become a substantial part of the workplace, adapting and tailoring vision benefit programs to their specific needs is essential. This generation looks for plans that include full coverage of yearly eye exams and premium lens options to address issues like light sensitivity and digital eye strain. Furthermore, one study conducted before the pandemic found that Gen Z employees are more inclined to accept a job when vision insurance is offered.

Moreover, younger generations are more likely to quit their jobs if they are not getting the healthcare coverage they want, contributing to the phenomenon known as the “Great Resignation.” LinkedIn’s recent findings highlight this trend, revealing an 80 percent year-over-year increase in job transitions among Gen Z and a 50 percent transition rate for millennials. In today’s competitive talent market, providing healthcare benefits tailored to each generation with the appropriate level of technological support is a strategic tool for companies to attract and retain top-tier talent.


  1. https://healthactioncouncil.org/resources/blog/millennials-and-their-children-whats-driving-healthcare-utilization/.
  2. https://www.millennialmarketing.com/wp-content/uploads/2017/11/Barkley_Report_NewPicOfHealth_FINAL2.pdf.
  3. https://www.mckinsey.com/industries/healthcare/our-insights/addressing-the-unprecedented-behavioral-health-challenges-facing-generation-z.