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


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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

  1. 1. Plain Talk about Health Insurance: Getting the Context RightLynn QuincySeptember 7, 2012 1
  2. 2. Yes, THAT Consumer Reports 2
  3. 3. 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
  4. 4. 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
  5. 5. 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
  6. 6. 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
  7. 7. Overcoming mis-perceptions ofpolicymakersWe must abandonthe image of acareful shoppercapable ofweighing themyriad costs andbenefits of theirhealth insuranceoptions 7
  8. 8. 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
  9. 9. 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
  10. 10. 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
  11. 11. 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
  12. 12. 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
  13. 13. 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
  14. 14. Implications We are effectively asking consumers to shop blindfolded. It is like providing health plan detail in a foreign language. 14
  15. 15. 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
  16. 16. 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
  17. 17. 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
  18. 18. 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
  19. 19. 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: 19articleId/648/ctl/ReadCustom%20Default/Default.aspx
  20. 20. That’s a Lot Of Challenges But There’s Also Some Good News
  21. 21. The 2010 Affordable Care Act provides a UNIQUE opportunity to educate consumers so they can navigate health insurance and health care
  22. 22. 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
  23. 23. 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
  24. 24. 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
  25. 25. 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
  26. 26. 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
  27. 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
  28. 28. Provide Consumer-FriendlyComparative Information About PlansChoice Architecture is “organizing the context in which people make decisions”and it profoundly influences consumers’ selections. 29
  29. 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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  32. 32. 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
  33. 33. Thank you!Please emailLynn Quincy withany questions:lquincy “at” consumer.orgReports can be 34