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Lynn Quincy - Health Insurance Literacy

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Presented by Lynn Quincy, MA, on March 13, 2015 at the fifth Center for Health Literacy Conference: Plain Talk in Complex Times.

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Lynn Quincy - Health Insurance Literacy

  1. 1. 1 Lynn Quincy Associate Director, Health Policy Plain Talk Mar 13, 2015 #HealthInsLit Health Insurance Literacy – From Zero To Fifty In Four Years
  2. 2. 2 Yes, THAT Consumer Reports
  3. 3. 3 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?
  4. 4. 4 4 2011: Consumer Testing New Insurance Disclosures Revealed… …Consumers Hate Health Insurance Shopping
  5. 5. 5 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
  6. 6. 6 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
  7. 7. 7 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
  8. 8. 88 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
  9. 9. 9 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)
  10. 10. 10 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
  11. 11. 11 New term needed: Health Insurance Literacy Lit review revealed:  Few studies of Health Insurance Literacy (HIL)  No standardized measures of HIL
  12. 12. 12 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
  13. 13. 13 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.
  14. 14. 14 Health Insurance Literacy Requires Different Skills Financial Literacy Health Literacy Health Insurance Literacy
  15. 15. 15 Time goes by……
  16. 16. 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
  17. 17. 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
  18. 18. 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. 18Notes: English speakers, ages 22-64. http://aircpce.org/wp- content/uploads/2014/10/11801-451-05_Issue_Brief_102014.pdf
  19. 19. 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 19Sources: Loewenstein, “Consumers’ misunderstanding of health insurance,” Journal of Health Economics, September 2013; Kaiser Family Foundation, Survey of Health Insurance Marketplace Assister Programs, July 2014
  20. 20. 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. 20
  21. 21. 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 21
  22. 22. 2222 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%20M assachusetts%20Experience%20Benefit%20Designs%20Toolkit%20v2.pdf
  23. 23. 23
  24. 24. 24 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
  25. 25. 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? 25
  26. 26. 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! 26
  27. 27. Cost-sharing will vary by whether providers are in or out of network 27 To minimize costs, patients should participate in the plan’s “network” $ $ $ $$ $ $$$ $$$ “In Network” “Outside of Network”
  28. 28. Deductible is what you pay first 28Jan DecJulMar Visit Doc for Flu: $150 Todd pays: $150 Colonoscopy $450 Todd pays: $0 (an exception to the deductible) Broken arm (waterskiing) $3,850 Todd pays: $850 (deductible) then coinsurance Todd’s plan has a $1,000 deductible: $150 $850 $450 $3,000 Todd pays: Plan pays: Todd & plan share the cost
  29. 29. Exceptions to Deductible  Free Preventive Health Services  including some vaccinations, mammograms and other cancer screenings, contraception, including birth control pills, and periodic physicals. But prevention services do not include treatment for an illness, such as the flu.  See: https://www.healthcare.gov/what-are-my-preventive-care- benefits/  Some plans offer 1-3 primary care visits before deductible – you have to look. 29 If the price for a doctor visit followed by the phrase "after the deductible is met" the consumer must pay the full deductible before getting doctor visits for indicated copayment or coinsurance amount.
  30. 30. Where can I find deductible information? 30
  31. 31. Provider Networks 31 • To minimize costs, patients must use doctors and hospitals that participate in the plan’s “network” $ $ $ $$ $ $$$ $$$
  32. 32. Where can I find provider network information? 32
  33. 33. How Cost-sharing Differs by Network “Tier” 33
  34. 34. General Resources 34 • 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 sstern@enrollamerica.org • More resources from NASHP: https://www.statereforum.org/sites/default/files/promising _practices_health_insurance_literacy_january_2015.pdf
  35. 35. 35 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
  36. 36. 36 Example: Health Insurance Basics Graphic Explainer
  37. 37. 37 www.healthtaxcredittool.org Short, interactive guide to Premium Tax Credit
  38. 38. Sample Page: Tax Credit Brochure
  39. 39. 39 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.
  40. 40. 40 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
  41. 41. Low Health Insurance Literacy 41 … 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
  42. 42. 42 Thank you! To contact me: lquincy “at” consumer.org www.consumersunion.org HIL Materials: http://consumerhealthchoices.org/ campaigns/health-insurance- literacy/#materials #HealthInsLit

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