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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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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
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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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%20Massachusetts%20Experience%20Benefit%20Designs%20Toolkit%20v2.pdf
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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”
$ $
$ $$$
$$$
$$$
“In Network”
“Outside of Network”
Deductible is what you pay first
28 Jan Dec Jul Mar
Visit Doc for Flu: $150 Todd pays: $150
Colonoscopy $450 Todd pays: $0 (an exception to the
deductible)
Broken arm (waterskiing) $3,850 Todd pays: $850 (deductible) then coinsurance
Todd’s plan has a $1,000 deductible:
$150
$850
$450
$3,000
Todd pays:
Plan pays:
Todd & plan share the
cost
Exceptions to Deductible
Free Preventive Health Services including some vaccinations, mammograms and other cancer
screenings, contraception, including birth control pills, and periodic physicals. But prevention services do not include treatment for an illness, such as the flu.
See: https://www.healthcare.gov/what-are-my-preventive-care-benefits/
Some plans offer 1-3 primary care visits before deductible – you have to look.
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If the price for a doctor visit followed by the phrase "after the deductible is met" the consumer must pay the full deductible before getting doctor visits for indicated copayment or coinsurance amount.
Provider Networks
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• To minimize costs, patients must use doctors and hospitals that participate in the plan’s “network”
$ $
$ $$$
$$$
$$$
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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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