1) Health insurance literacy refers to an individual's ability to understand health insurance plans, choose the best plan for their needs, and use their plan once enrolled. Most consumers have low health insurance literacy. 2) A new tool was developed in 2014 to measure health insurance literacy levels. Studies using this tool found that three-quarters of consumers were confident in their insurance knowledge but few could accurately calculate costs. 3) To improve health insurance literacy, clear information and education materials need to be developed to help consumers understand insurance basics like premiums, deductibles, networks and exceptions. Many free resources are now available online.

1. 1
Lynn Quincy
Associate Director, Health Policy
Plain Talk
Mar 13, 2015
#HealthInsLit
Health Insurance Literacy –
From Zero To Fifty In
Four Years

2. 2
Yes, THAT Consumer Reports

3. 3
Confession
I am not a communicator…
…I am an economist
…who does policy analysis, primarily
focused on health insurance issues.
How did I get here?

4. 4
4
2011: Consumer Testing New
Insurance Disclosures Revealed…
…Consumers
Hate Health
Insurance
Shopping

5. 5
To put this into prespective…
…consumers would prefer to:
Go to the gym or
Pay their taxes
Rather than shop for health insurance.
Source: ehealth, Inc., “New Survey Shows Americans Lack Understanding of Their Health
Coverage and Basic Health Insurance Terminology,” January 3, 2008, available at
http://www.insurancenewsnet.com/article.asp?a=top_news&id=89712

6. 6
Health Insurance Shopping:
What are the Barriers?
 Consumers can’t meaningfully distinguish
between products
 Consumers may not trust the information
available to them
 They realize there are great financial and
health implications for their families
 Adds up to anxiety and dreading the
exercise

7. 7
Consumers want a good
“value” but can’t calculate
value
Consumers care about cost.
But they don’t want the lowest cost plan, they
want the best value plan they can afford.
Notion of value is sophisticated:
•scope of services covered
•share of the cost paid by plan
•sometimes the quality of providers

8. 88
Consumers are confused by
cost-sharing terms
This is the greatest area of confusion.
They don’t know the vocabulary: deductible,
coinsurance, benefit maximum, allowed amount,
out-of-pocket maximum
These complex concepts must THEN be used
together to estimate patient’s cost for services (do
copays count towards the deductible?)
#HealthInsLit

9. 9
Example: co-insurance
Three distinct things were difficult:
 Who is paying the indicated percentage?
 How to calculate a percent?
 What is the percentage applied to? (the
allowed amount)

10. 10
Which would you choose?
Health Plan A or Health Plan B
Terms:
εκπεστέου είναι
$4.000· η
μητρότητα δεν
είναι
καλύπτονται
Terms:
εκπεστέου είναι
$1,000 7
μητρότητα έχει
$5.000 όφελος
όριο

11. 11
New term needed:
Health Insurance Literacy
Lit review revealed:
 Few studies of
Health Insurance
Literacy (HIL)
 No standardized
measures of HIL

12. 12
What is
Health Insurance Literacy?
Health insurance literacy measures the
degree to which individuals have the
knowledge, ability, and confidence to
find and evaluate information about
health plans, select the best plan for
their financial and health circumstances,
and use the plan once enrolled.
Source: Measuring Health Insurance Literacy: A Call to Action,
Consumers Union and partners, February 2012

13. 13
Is HIL the same as or different
than Health Literacy?
There are at least 26 tools to measure
health literacy BUT health insurance
literacy is different.
A compilation of over
200 studies, none of
which examine health
insurance.
See also: “Health Literacy Measurement: An Inventory and Descriptive Summary of 51
Instruments,” Journal of Health Communication: International Perspectives Volume
19, Supplement 2, 2014.

14. 14
Health Insurance Literacy Requires
Different Skills
Financial
Literacy
Health
Literacy
Health
Insurance
Literacy

15. 15
Time goes by……

16. In 2014…
 Term “Health Insurance Literacy”
comes into common usage
 New polls measure levels of HIL
 Funders interested in HIL
 New work on consumer facing tools
 A clearinghouse for tools
16#HealthInsLit

17. New Measurement Tool …
 New Health Insurance Literacy
Measure© from the American
Institutes for Research consists of 21
self-report questions assessing self-
confidence and behaviors associated
with choosing and using health
insurance.
 Survey tool is free to public after
registration.
17
See more at: http://aircpce.org/airs-work-in-
cpce/health-insurance-literacy

18. New Data Confirm Low HIL
 Three-quarters confident that they knew how to
use health insurance, but many said they didn’t
look at a plan’s benefits before signing up.
 Only one in five could accurately calculate how
much a doctor’s visit would cost when provided
with a plan’s copayment, deductible and
coinsurance information.
 Generally, younger people, those who use fewer
health care services, minorities, people with lower
incomes and those with less education have more
difficulties navigating health insurance.
 People learn by doing.
18Notes: English speakers, ages 22-64. http://aircpce.org/wp-
content/uploads/2014/10/11801-451-05_Issue_Brief_102014.pdf

19. More Evidence for Low HIL
• Americans are confident but actual
understanding is very low
• Only 14 percent accurately understood
deductible, copay, co-insurance and
out-of-pocket maximum
• 44 percent of consumer assistance
programs had seen people who did not
understand how to use insurance
19Sources: Loewenstein, “Consumers’ misunderstanding of health insurance,” Journal of Health Economics,
September 2013; Kaiser Family Foundation, Survey of Health Insurance Marketplace Assister Programs,
July 2014

20. How do we make things better
for consumers?
 Get robust, nuanced information about
the challenges consumers face
 Use this information to:
 improve the underlying products and the
system in which they are purchased,
 improve the way products are
communicated
 And to educate and activate consumers.
20

21. Health insurance shopping
has gotten better….
 No more pre-existing condition exclusions
 No more exceptions to OOPM
 No more dollar-denominated annual and
lifetime limits
And in non-group market:
 Covered services standardized
 Plans grouped into actuarial value tiers
 Standard set of preventive services
covered at no cost
21

22. 2222
Have We Done Enough To Help
Consumers Shop For Coverage?
Not yet.
Health insurance is still pretty complex.
Massachusetts’consumer testing found that
additional simplification was needed.
See: http://bluecrossmafoundation.org/Health-
Reform/Lessons/~/media/Files/Health%20Reform/Lessons%20for%20National%20Reform%20from%20the%20M
assachusetts%20Experience%20Benefit%20Designs%20Toolkit%20v2.pdf

23. 23

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What Does a Health Insurance
Literate Consumer Need to Know?
How health insurance
works
Where and when to shop
Financial help is available
How to find a plan that meets budget
and needs
How to use health
insurance
Where to go for help!
#HealthInsLit

25. Three things to know
about plan choices
1. Premiums and resources that reduce
premiums
2. Adequacy of Coverage:
 Covered services/drug formularies
 Out-of-pocket costs
3. Does Provider Network include
YOUR doctors and hospitals?
25

26. Premiums
 Fixed payment every month
….whether or not you use medical
services
 You can get help paying the premium
(tax credits)
 Premium isn’t your only cost!
26

27. Cost-sharing will vary by whether
providers are in or out of network
27
To minimize costs, patients should
participate in the plan’s “network”
$
$
$ $$
$
$$$
$$$
“In
Network”
“Outside of
Network”

28. Deductible
is what you pay first
28Jan DecJulMar
Visit Doc
for Flu:
$150
Todd
pays: $150
Colonoscopy
$450
Todd pays:
$0
(an exception
to the
deductible)
Broken arm (waterskiing)
$3,850
Todd pays: $850
(deductible) then
coinsurance
Todd’s plan has a
$1,000 deductible:
$150
$850
$450
$3,000
Todd pays:
Plan pays:
Todd & plan
share the
cost

29. Exceptions to Deductible
 Free Preventive Health Services
 including some vaccinations, mammograms and other cancer
screenings, contraception, including birth control pills, and
periodic physicals. But prevention services do not include
treatment for an illness, such as the flu.
 See: https://www.healthcare.gov/what-are-my-preventive-care-
benefits/
 Some plans offer 1-3 primary care
visits before deductible – you have to
look.
29
If the price for a doctor visit followed by the phrase "after the deductible
is met" the consumer must pay the full deductible before getting doctor
visits for indicated copayment or coinsurance amount.

30. Where can I find deductible information?
30

31. Provider Networks
31
• To minimize costs, patients must use
doctors and hospitals that
participate in the plan’s “network”
$
$
$ $$
$
$$$
$$$

32. Where can I find provider network
information?
32

33. How Cost-sharing Differs by
Network “Tier”
33

34. General Resources
34
• Health Insurance Literacy Clearing House for digital tools, fact sheets and
other handouts, and videos to help fill gaps in health insurance literacy
among consumers. http://www.enrollamerica.org/hil/
• Sign up for the Health Insurance Literacy Listserv! Email
sstern@enrollamerica.org
• More resources from NASHP:
https://www.statereforum.org/sites/default/files/promising
_practices_health_insurance_literacy_january_2015.pdf

35. 35
English Spanish
Health Law Helper – an interactive tool that
explains what the new law means for you √ √
Summary of Benefits and Coverage – a new
form that everyone should know about √
Health Tax Credit Tool – an interactive tool
that explains the new tax credits that help pay
for insurance
√ √
State Specific Tax Credit Brochures √ √
Health Insurance Basics – graphical one
pagers √ √
Fact Sheet: How to Report Your Income √ √
Fact Sheet: What to Do At Tax Time √ √
Fact Sheet: What Is Tax Reconciliation?
√ √
Resources from
Consumer Union
http://consumerhealthchoices.org/campaigns/health-insurance-literacy/#materials

36. 36
Example:
Health
Insurance
Basics
Graphic
Explainer

37. 37
www.healthtaxcredittool.org
Short, interactive guide to
Premium Tax Credit

38. Sample Page: Tax Credit Brochure

39. 39
A Happy Alignment of Goals
 If health insurance markets are going
to work, consumers must be able to
play their role as informed, activated
shoppers.
 In turn, if consumers are going to
really understand health insurance,
policymakers, funders and
professional communicators must
step in.

40. 40
Failure to Address Consumer
Confusion has Grave Consequences
 Consumers underinsured, often leading
to medical bankruptcy
 Under-insured consumers act like
uninsured consumers – they delay
getting care
 Inability to effectively compare plans
undermines the health plan marketplace
 Strains customer help lines
#HealthInsLit

41. Low Health Insurance
Literacy
41
… is just one piece of the complex
puzzle of health insurance
Low Health
Insurance
Literacy
New Rules for
getting
coverage
Complex
Insurance
Documents
Tiered
Provider
Networks
Confusing
Medical Bills
Drug
Formularies

42. 42
Thank you!
To contact me:
lquincy “at” consumer.org
www.consumersunion.org
HIL Materials:
http://consumerhealthchoices.org/
campaigns/health-insurance-
literacy/#materials
#HealthInsLit