Quincy priester april 11 2012

Improving the Nation’sHealth: Making SureConsumers Can Play TheirRoleLynn QuincyApril 11, 2012 1

Yes, THAT Consumer Reports 2

The 2010 Affordable Care Act ….it requires a whole new script

Health Reform Implementation Timeline (selected reforms)

Estimated Health Insurance Coverage in 2019 Total Nonelderly Population = 282 MillionSOURCE: Congressional Budget Office, March 20, 2010

Selected reforms are beingdebated by the Supreme Court In early March, heard oral arguments on: • The constitutionality of the individual mandate; • Whether the individual mandate can be severed from the remainder of the ACA; • ACAs provisions concerning expansion of the Medicaid program; and • Procedural questions regarding application of the Anti- Injunction Act to challenges against the ACA (stems from the Fourth Circuits ruling in September 2011). A decision is expected June 2012. 6

But there’s much more… New Health Plan Transparency Summary of Benefits and Coverage form New public reporting on rates, customer satisfaction, denied claims, out-of-network provisions, etc New quality reporting New Provider Quality Transparency Value of employer provided coverage reported on W-2. Financial relationships among providers, suppliers, and manufacturers will be publicly disclosed Stronger appeal rights for consumers with “self- insured” employer coverage. 7

Keep in mind …The health reform laws true impact will be shaped by the decisions of consumers, employers, federal health officials and states. 8

We have a UNIQUE opportunityto educate consumers so they can navigate health insurance and health care.

Opportunity Arises from… Tremendous consumer confusion about the law and poor health literacy and health insurance literacy New public data reporting can help in decision-making Consumers are looking for information – especially Fall of 2013 Some funding exists for ACA outreach 10

Let’s get into the weeds… Consumer testing in support of the development of the Summary of Benefits and Coverage form resulted in: Improvements to the form Better understanding of consumers’ difficulties understanding health insurance Spotlighted the dearth of consumer testing 11

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. 12

Lesson #1:Abandon the imageof a carefulshopper capable ofweighing themyriad costs andbenefits of theirhealth insuranceoptions 13

Lesson #2: Consumers DreadShopping for Health Insurance I think medical insurance is probably one of the hardest things for me that I shop for. And I think one of the hardest things is to figure out what’s covered. -quote from report: Early Consumer Testing of New Health Insurance Disclosure Forms 14

Lesson #3: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: there is different from the notion that “I’m young and invincible.” Rests on a skewed notion of what insurance is. 15

Implications Convey the value and purpose of insurance in a compelling way Expect to provide health insurance education using a multi-layered, “just-in-time” approach Showing what the plan would pay for a serious illness often altered these views 16

Lesson #4: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 18

Lesson #5: Consumers areconfused by cost-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?) 19

Sophisticated computation skills are required Is this a No pharmacy Yes expense? Have Have I met the I met the medical pharmacy deductible? deductible?No Yes Yes No Have I met the Pay fullPay full annual amountamount Out-of-pocket Max? No Yes Pay nothing Subject to any annual benefit limits? No Yes 20 More calcs M l

Implications We are effectively asking consumers to shop blindfolded. It is like providing health plan detail in a foreign language. 21

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 22

Lesson #6: Some medicalcoverage terms are alsoconfusing What is the difference between primary and preventive care? What are specialty drugs? How does a diagnostic test differ from a screening? 23

Implications Assume that 85% of traditional insurance information is ignored/not used. 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 Facts Labels Avoid jargon (allowed amount, benefit limit, preferred/non-preferred etc.) Use terms that are familiar to most consumers. Substitute terms will have to be tested. 24

Lesson #7: Consumers need a“mental map” to navigate acomplex topic 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. 25

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 accidents… 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. 26

Implications 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. 27

Lesson #8: Providing clarity isinsufficient; information mustalso 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.” 28

Implications Cultivate an image as a trusted source for information Manage consumer expectations – don’t oversell Partner with trusted entities 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 29

Lesson #9: Consumers need amanageable number of choices Given the cognitive difficulty of evaluating their choices, consumers don’t want an unlimited number of choices Better: a manageable number of “good” (vetted) choices Even Better: reducing the number of features that can vary between plans makes them easier to compare 30

Implications Pay attention to the number of options facing consumers. Consumer testing in Massachusetts led that Exchange to reduce choices from 27 to 9. Embrace the ACA provisions that standardize health plan designs. Consider additional benefits standardization. Help consumers navigate the remaining variation by explaining the implications of their choices. 31

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 32

The Ability to Measure Consumers’Health Insurance Literacy WouldChange the Conversation Financial Health Health Literacy Literacy Insurance Measures Measures (multiple) Literacy (multiple) 33

What is Health Insurance Literacy?A working definition: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 own (or their family’s) financial and health circumstances, and use the plan once enrolled. 34

Don’t we have a lot of healthliteracy measures?There are at least 13 tools that measure health literacy BUT health insurance literacy is different. A recent compilation of over 200 studies, none of which examine health insurance. 35

Project TimelineNov 2011 expert roundtableFeb 2012 roundtable report releasedFeb-Mar 2012 interview stakeholders, refine conceptual modelApr-Jun 2012 preliminary testingJul-Nov 2012 field test/revise instrumentDec 2012 draft users manualJan 2013 STATES USE THE MEASURE TO PREPARE FOR 2014 REFORMS (outreach, health plan comparisons, etc) 36

Participate in Our Project Join the list-serv and follow our progress Read the expert roundtable report that kicked off the project Participate in our research committee Participate in our dissemination committee Help us identify funding sources Become a spokesperson for the projectFind out more: http://www.consumersunion.org/health_ins urance_literacy_project 37

Thank you!Please emailLynn Quincy withany questions:quinly “at” consumer.org 38

Quincy priester april 11 2012

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