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Bridging The Gap on Healthcare Consumers' Health Insurance Literacy

Young health IT professionals

According to the latest government estimates, the number of Americans who have gained access to health insurance — through the marketplace or Medicaid expansion — stands at 20 million. Unfortunately, low levels of health and insurance literacy mean that millions of those newly insured individuals are still struggling to use health insurance effectively. Why? In spite of rising healthcare consumerism, many healthcare consumers lack the experience to navigate the complexities of health insurance, choose the plan most appropriate for their needs and make informed health decisions. Those healthcare consumers with limited English proficiency face an even greater struggle. And, while the Kaiser Family Foundation reports that the uninsured rate for non-elderly adults has declined significantly since the opening of the health insurance marketplace and expansion of Medicaid in some states, approximately 10.7 percent of the U.S. population remains uninsured.

What’s Holding Many Healthcare Consumers Back? Low Health Literacy

For Americans who are still uninsured, a lack of health insurance literacy severely limits their ability to select appropriate coverage. Likewise, whether a consumer acquires insurance through an employer or marketplace, poor health insurance literacy can lead to frustration, disappointment — and in some cases — a decision to drop the coverage altogether. Health insurance literacy is not just about understanding terminology, it also involves understanding how to make the right choices.

The New York Times discovered evidence of this when it looked into high-deductible plans offered through HealthCare.gov. Noting that, “in many states, more than half the plans… have a deductible of $3,000 or more,” the New York Times cited consumers like:

  • Kevin Fanning, a 59-year-old in Texas who dropped his policy because the high deductible meant he could not afford to use the insurance.
  • Alexis Phillips, a 29-year-old in Texas — and a prime target for the federal marketplace — who considered enrolling but changed her mind despite threat of a tax penalty, saying that “the deductibles are ridiculously high. I will never be able to go over the deductible unless something catastrophic happened to me. I’m better off not purchasing that insurance and saving the money in case something bad happens.”
  • Wendy Kaplan, a 50-year-old in Illinois who admits that the high deductible has forced her family to use their new health insurance for basic wellness appointments and emergencies only.

The high deductibles are meant to motivate healthcare consumers to shop around for services, but as we’ve noted in previous blogs, the complexity of our current healthcare billing system coupled with a lack of price transparency makes it nearly impossible for consumers to do so.

Moreover, low health insurance literacy often hinders consumers from selecting and using the health insurance plan most suited for their particular situation. Take the low-premium, high-deductible plans that are a mainstay of the insurance marketplace. Many consumers consider the impact of the monthly premium on their budget, and make their decision based on the premium, first and foremost. While that approach may work for a young adult with few chronic health concerns, considering the premium alone falls short for older consumers and those with chronic diseases.

In fact, Drew Altman, Kaiser Family Foundation president and CEO, noted in a Wall Street Journal op-ed that consumers that are eligible to enroll in the marketplace lack confidence in their understanding of basic insurance principles:

  • 36 percent are unsure about a what a premium entails
  • 35 percent lack awareness of covered services
  • 31 percent do not understand deductibles

This corresponds with earlier foundation research that found that only 41 percent of healthcare consumers knew that doctors who practice at an in-network hospital aren’t necessarily in-network themselves and only 33 percent realized that a formulary is a list of covered prescription drugs. And younger, less educated or uninsured consumers are even more likely to answer questions incorrectly.

The Negative Consequences of Low Health Literacy

Shopping for health insurance plans — and then subsequently shopping for healthcare services — isn’t like shopping on Amazon. Consumers can’t just Google ‘best price for knee replacement,’ read a few reviews and then click to schedule an appointment. That may change in time, of course, but health literacy remains crucial — and not just so consumers can choose the right insurance policy for their needs and use it effectively. Health literacy is also an important factor in fueling engagement, improving consumers’ abilities to manage their own health and driving better health outcomes.

The Commonwealth Fund found that 40 percent of people with high deductible health insurance policies admitted that they had avoided going to the doctor when sick, failed to seek preventive care tests, skipped recommended follow-up tests or put off specialist care because of their deductible. Many of the community organizations that helped people sign up on the federal insurance marketplace when it first opened are being inundated with calls from those same consumers who now struggle to understand and use their health insurance policies. Karen Pollitz, a senior fellow at the Kaiser Family Foundation, calls it “the boomerang effect.”

Not knowing where to turn for help, consumers go back to a trusted source, in this case the programs that helped them navigate the confusing insurance landscape originally. According to a Foundation survey of consumer assistance programs, 90 percent of those programs were re-contacted by consumers and 44 percent had met with people who didn’t understand how to use their insurance.

How Organizations Are Addressing the Health Literacy Issue

The Washington Post noted in 2014 that “demand for help from consumers has been so overwhelming at the Pennsylvania Health Access Network, a statewide coalition working to expand insurance coverage, is launching special seminars for consumers.” Now, in 2016, a number the organizations that were launched to help consumers buy insurance through the marketplace are no longer receiving funding. As a result, other organizations — including insurers and healthcare providers — are having to step into the breach.

Horizon Blue Cross Blue Shield of New Jersey is teaming up with HolaDoctor to create an enrollment and service office offering one-on-one help for Hispanic healthcare consumers, one demographic that struggles with health literacy for multiple reasons.  Bilingual agents will not only aid in plan selection, but will also offer on-going support throughout the year to bridge the gap between acquiring and effectively using insurance.

Christopher M. Lepre, senior vice president, Market Business Units for Horizon BCBSNJ, notes that “Nearly one of five Hispanic residents in New Jersey remains uninsured, and those who have coverage face many cultural and language barriers to accessing the health care system.” By stepping in to help Hispanic healthcare consumers enroll in the right plan for their needs and understand what that coverage includes, the insurer hopes to empower Hispanic consumers.

FierceHealthPayer spoke with another organization that is targeting Hispanic consumers to improve health literacy. With funding from the New York Community Trust, nonprofit FAIR Health launched a Spanish-language version of its mobile app designed to help consumers better navigate the healthcare system in New York City. Robin Gelburd, president of FAIR Health, said, “Everyone is recognizing right now, it's a new paradigm for consumers in the healthcare marketplace — English speaking and otherwise — but if you're going to really arm consumers with actionable information, it has to be presented in a way that meets their needs.”

The app includes educational information on the basics of health insurance, from explaining the difference between HMOs and PPOs to glossaries of insurance, medical and dental terms. The app also includes a price estimator for medical and dental procedures to help Hispanic consumers estimate charges for procedures based on their health plan.

Clearly, the solution for improving health literacy won’t be easy, but healthcare consumerism demands that providers step into the fray to address what the Kaiser Family Foundation’s Drew Altman calls “a perilous gap in health insurance literacy.” Do you have plans in place?

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