5. Estimated Health Insurance Coverage in 2019
SOURCE: Congressional Budget Office, March 20, 2010
Total Nonelderly Population = 282 Million
6. 6
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;
• ACA's 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 Circuit's ruling in September 2011).
A decision is expected June 2012.
Selected reforms are being
debated by the Supreme Court
7. 7
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.
8. 8
Keep in mind …
The health reform law's true impact will
be shaped by the decisions of
consumers, employers, federal
health officials and states.
9. We have a
UNIQUE opportunity
to educate consumers
so they can navigate
health insurance
and health care.
10. 10
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
11. 11
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
12. 12
Three CU studies explored how
consumers shop for health
insurance
CO, MDMay 2011Actuarial Value
Concepts
MO, NYMay 2011“Coverage Facts
Label” (pages 5-6)
IA, NH, CA, OHSept-Oct 2010Pages 1-4 of new
health insurance
disclosure
Locations:
Mid-sized cities in…
When:Study Examined:
Participants were evenly divided between men/women; uninsured/
insured (non-group). A variety of education levels, ages (26-64), and
race/ethnic background, and prior familiarity with health insurance.
13. 13
Lesson #1:
Abandon the image
of a careful
shopper capable of
weighing the
myriad costs and
benefits of their
health insurance
options
14. 14
Lesson #2: Consumers Dread
Shopping 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
15. 15
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.
16. 16
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
17.
18. 18
Lesson #4:
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
19. 19
Lesson #5: 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
The underlying concepts are complex and they must
be used together to estimate patient costs for
services (do copays count towards the deductible?
the out-of-pocket maximum?)
20. 20
Sophisticated computation skills
are required
Is this a
pharmacy
expense?
Have
I met the
medical
deductible?
Have
I met the
pharmacy
deductible?
No Yes
No
Pay full
amount
Yes
Have
I met the
annual
Out-of-pocket Max?
No
Pay nothing
Subject to any
annual benefit
limits?
No Yes
Yes
Pay full
amount
No
Yes
More calcs M l
22. 22
Which would you choose?
Terms:
εκπεστέου είναι
$1,000 7
μητρότητα έχει
$5.000 όφελος
όριο
Terms:
εκπεστέου είναι
$4.000· η
μητρότητα δεν
είναι
καλύπτονται
Health Plan BorHealth Plan A
23. 23
Lesson #6: Some medical
coverage terms are also
confusing
What is the difference between
primary and preventive care?
What are specialty drugs?
How does a diagnostic test differ from
a screening?
24. 24
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.
25. 25
Lesson #7: Consumers need a
“mental map” to navigate a
complex 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.
26. 26
If they don’t have prior experience
with 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
you're 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.
27. 27
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.
28. 28
Lesson #8: 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.”
29. 29
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
30. 30
Lesson #9: Consumers need a
manageable 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
31. 31
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.
32. 32
Failure to Address Consumer
Confusion 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
33. 33
The Ability to Measure Consumers’
Health Insurance Literacy Would
Change the Conversation
Financial
Literacy
Measures
(multiple)
Health
Literacy
Measures
(multiple)
Health
Insurance
Literacy
34. 34
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.
35. 35
Don’t we have a lot of health
literacy 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.
36. 36
Project Timeline
STATES USE THE MEASURE TO
PREPARE FOR 2014 REFORMS
(outreach, health plan
comparisons, etc)
Jan 2013
draft users manualDec 2012
field test/revise instrumentJul-Nov 2012
preliminary testingApr-Jun 2012
interview stakeholders, refine
conceptual model
Feb-Mar 2012
roundtable report releasedFeb 2012
expert roundtableNov 2011
37. 37
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 project
Find out more:
http://www.consumersunion.org/health_ins
urance_literacy_project
