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Lynn Quincy - Plain talk about health insurance: Getting the context right

Lynn Quincy - Plain talk about health insurance: Getting the context right



Presented by Lynn Quincy, MA, on September 7, 2012 at the third annual Center for Health Literacy Conference: Plain Talk in Complex Times.

Presented by Lynn Quincy, MA, on September 7, 2012 at the third annual Center for Health Literacy Conference: Plain Talk in Complex Times.



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    Lynn Quincy - Plain talk about health insurance: Getting the context right Lynn Quincy - Plain talk about health insurance: Getting the context right Presentation Transcript

    • Plain Talk about Health Insurance: Getting the Context RightLynn QuincySeptember 7, 2012 1
    • Yes, THAT Consumer Reports 2
    • ConfessionI am not a communicator……I am an economist…who does policy analysis, primarily focused on health insurance issues.How did I get here? 3
    • 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 must step in. 4
    • Failure to Address ConsumerConfusion has Grave Consequences Consumers find themselves underinsured, too 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 5
    • How Can We Improve Consumers’Ability to Function in the HealthInsurance Marketplace? Get better information about the challenges consumers face Use this information to:  improve the underlying products,  improve the way products are communicated and  activate consumers. 6
    • Overcoming mis-perceptions ofpolicymakersWe must abandonthe image of acareful shoppercapable ofweighing themyriad costs andbenefits of theirhealth insuranceoptions 7
    • Three CU studies explored howconsumers shop for healthinsuranceStudy Examined: When: Locations: Mid-sized cities in…Pages 1-4 of new Sept-Oct 2010 IA, NH, CA, OHhealth insurancedisclosure“Coverage Facts May 2011 MO, NYLabel” (pages 5-6)Actuarial Value May 2011 CO, MDConceptsParticipants were evenly divided between men/women; uninsured/insured (non-group). A variety of education levels, ages (26-64), andrace/ethnic background, and prior familiarity with health insurance. 8
    • Consumers Dread Shopping forHealth Insurance I think medical insurance is probably oneof the hardest things for me that I shop for.And I think one of the hardest things is tofigure out what’s covered.-quote from report: Early ConsumerTesting of New Health InsuranceDisclosure Forms 9
    • Consumers Doubt the Value/Purpose of Health Insurance Many view health insurance as pre-paid health care, rather than insurance. If they don’t expect to use much health care next year, doesn’t seem like a good value.Note: this is different from the notion that “I’m young and invincible.” Rests on a skewed notion of what insurance is. 10
    • Consumers want a good “value”but can’t calculate valueConsumers care about cost.But they don’t want the lowest costplan, they want the best value planthey can afford.Notion of value is sophisticated: •scope of services covered •share of the cost paid by plan •sometimes the quality of providers 11
    • Consumers are confused bycost-sharing termsThis is the greatest area of confusion.They don’t know the vocabulary: deductible,coinsurance, benefit maximum, allowed amount,out-of-pocket maximumThe underlying concepts are complex and they mustbe used together to estimate patient costs forservices (do copays count towards the deductible?the out-of-pocket maximum?) 12
    • Sophisticated computation skills are required Is this a No pharmacy Yes Have expense? Have I met the I met the medical pharmacy deductible? Yes Yes deductible? No No Have I met the Pay fullPay full amountamount annual Out-of-pocket Max? No Yes Subject to any Pay nothing annual benefit limits? No Yes More calcs More calcs 13
    • Implications We are effectively asking consumers to shop blindfolded. It is like providing health plan detail in a foreign language. 14
    • Which would you choose?Health Plan A or Health Plan BTerms: Terms:εκπεστέου είναι εκπεστέου είναι $4.000· η $1,000 7 μητρότητα δεν μητρότητα έχει είναι $5.000 όφελος καλύπτονται όριο 15
    • Some medical coverage termsare also confusing What is the difference between primary and preventive care? What are specialty drugs? How does a diagnostic test differ from a screening? 16
    • Consumers need a “mentalmap” to navigate a complextopic like insurance If this “map” or framework is missing, decisions aids like glossaries or well- designed disclosures can do little to help consumers—there is nothing for them to attach the information to. If they have prior experience with health insurance, consumers view new information through that lens. Example: Copays counted towards the deductible in my old plan so this plan probably works the same way. 17
    • If they don’t have prior experiencewith health insurance…… they’ll use other experiences – like car insurance.Moderator: So let’s say [you] had a really bad year and you had two illnesses… you think each time youre going to have to pay that deductible?Participant: Yeah, because it’s just like an accident in a car. If I crash my car 10 times I [would have to keep paying the deductible] …it’ll be a loss for the insurance company just having a one-time deductible. 18
    • Providing clarity is insufficient; information must also be trusted  If consumers don’t trust the information, they won’t use it  Trust levels are very low for health insurers*  Even when consumers have a good grasp of the information in front of them, they often don’t trust their analysis. They worry about the “fine print” because health insurers are “tricky.”*Harris Poll, 2010: http://www.harrisinteractive.com/NewsRoom/HarrisPolls/tabid/447/mid/1508/ 19articleId/648/ctl/ReadCustom%20Default/Default.aspx
    • That’s a Lot Of Challenges But There’s Also Some Good News
    • The 2010 Affordable Care Act provides a UNIQUE opportunity to educate consumers so they can navigate health insurance and health care
    • Opportunity Arises from… Consumers will be actively looking for information – especially Fall of 2013 (just before major reforms take place) Federal funding exists for ACA outreach The ACA standardizes some health insurance features, making comparisons easier New insurer reporting can help consumer decision-making 22
    • Selected ACA Reforms Type of Reform By Sept 23, 2012 Jan 1, 2014 Standardization of  No lifetime limits  Upper-limit on Patient’s Maximum OOP health  Some preventive services w/o  No $ annual limits insurance cost-sharing  Individual and small group plans conform to products* actuarial value tiers and cover essential health benefits; priced using a limited set of rating factors  Plans sold in exchanges are “qualified” New Transparency Summary of Benefits and  Claims payment policies and practices Coverage form, including  Periodic financial disclosures “Coverage Examples”  Data on enrollment  Data on disenrollment  Data on the number of claims that are denied  Information on cost-sharing and payments with respect to out-of-network coverage  Plans sold on the exchange must have “calculators” or other method of determining OOP cost for a service. 23*Some exceptions for Grandfathered Plans
    • How We Can Help Consumers Provide a mental map. When people can see the “bigger picture” of how insurance works, they have a “map” on which to tack the details. Explain health insurance from the point of view of what it means to them. Short glossary definitions and other decision aids should be provided but need to be accompanied by that “map” to be effective. 24
    • Example Showing what a plan would pay for a serious illness altered consumers’ views – it conveyed the value and purpose of insurance in a compelling way. 25
    • Communicate Using TrustedMessengers Partner with trusted entities Manage consumer expectations – don’t oversell Merit consumer trust:  vet health plans well,  strive for stability in offerings,  invest in good communications,  test communications with consumers, and  engage in these activities over the long run 27
    • Provide “Short Cuts” Assume consumers will use cognitive short-cuts to “get through” the task of shopping for coverage. Consider developing short-cuts to help consumers to make an informed choice:  Actuarial Value Tiers  Measures of network adequacy  Coverage Examples 28
    • Provide Consumer-FriendlyComparative Information About PlansChoice Architecture is “organizing the context in which people make decisions”and it profoundly influences consumers’ selections. 29
    • Carefully Consider the Structure ofInitial Search ResultsWhy? Because consumers often look no further and use these initial results to make their decision.  PBGH/CalPERS: 93% of the time the default display of information is accepted by users.  Checkbook: More than 60% of users make their decisions without viewing any other information beyond the initial summary screen. 30
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    • A Good Understanding of ContextLeads to Impactful Communications The clearest communication will not be impactful unless we do everything else right:  Consumer has the underlying “mental map” needed to understand the message  Message comes from a trusted source  Message is delivered at the right time, in the right way  The larger environment for the message has been considered  Message has been tested with consumers 33
    • Thank you!Please emailLynn Quincy withany questions:lquincy “at” consumer.orgReports can be downloadedfrom:www.consumersunion.org/health 34