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

Lynn Quincy - Health Insurance Literacy

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Lynn Quincy Associate Director, Health Policy Plain Talk Mar 13, 2015

#HealthInsLit

Health Insurance Literacy – From Zero To Fifty In Four Years

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Yes, THAT Consumer Reports

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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?

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2011: Consumer Testing New Insurance Disclosures Revealed…

…Consumers Hate Health Insurance Shopping

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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

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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

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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

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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

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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)

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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

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New term needed: Health Insurance Literacy

Lit review revealed:

Few studies of Health Insurance Literacy (HIL)

No standardized measures of HIL

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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

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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.

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Health Insurance Literacy Requires Different Skills

Financial Literacy

Health Literacy

Health

Insurance

Literacy

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Time goes by……

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

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

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.

18 Notes: English speakers, ages 22-64. http://aircpce.org/wp-content/uploads/2014/10/11801-451-05_Issue_Brief_102014.pdf

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

19 Sources: Loewenstein, “Consumers’ misunderstanding of health insurance,” Journal of Health Economics, September 2013; Kaiser Family Foundation, Survey of Health Insurance Marketplace Assister Programs, July 2014

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.

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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

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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

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?

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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!

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Cost-sharing will vary by whether providers are in or out of network

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To minimize costs, patients should participate in the plan’s “network”

$ $

$ $$$

$$$

$$$

“In Network”

“Outside of Network”

Deductible is what you pay first

28 Jan Dec Jul Mar

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

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.

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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.

Where can I find deductible information?

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Provider Networks

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

$ $

$ $$$

$$$

$$$

Where can I find provider network information?

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How Cost-sharing Differs by Network “Tier”

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General Resources

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• 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 [email protected]

• More resources from NASHP: https://www.statereforum.org/sites/default/files/promising_practices_health_insurance_literacy_january_2015.pdf

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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

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Example: Health Insurance Basics Graphic Explainer

37 www.healthtaxcredittool.org

Short, interactive guide to Premium Tax Credit

Sample Page: Tax Credit Brochure

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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.

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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

Low Health Insurance Literacy

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… 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

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Thank you!

To contact me:

lquincy “at” consumer.org

www.consumersunion.org

HIL Materials:

http://consumerhealthchoices.org/ campaigns/health-insurance-literacy/#materials

#HealthInsLit