Health Insurance Literacy: Communicating Access to Coverage

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October 17, 2016
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As we mark the sixth year anniversary of the Affordable Care Act (ACA), we can celebrate the enrollment of tens of millions of people who have historically been uninsured into health insurance programs. However, we also know that problems — particularly around health insurance literacy — still persist. Health insurance literacy is 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.

Through our work at the MAXIMUS Center for Health Literacy, we know consumers still have difficulties with health insurance literacy. Many people without insurance don’t understand how to enroll and choose a plan that will provide the proper coverage. And many people with insurance don’t understand their benefits and how to use them. More specifically, people still struggle with:

  • Cost-sharing terminology, such as coinsurance, annual benefit limit and out-of-pocket maximum
  • Medical services terminology, such as understanding the difference between a screening and a diagnostic test.
  • The numbers, such as co-pay and premium amounts and cost-sharing percentages.

As a result, many consumers don’t enroll, don’t choose the plan that is best for them, or stay in the same plan year after year — even when better choices are available to them. We also see people who aren’t maximizing their benefits and paying more than they should. When consumers struggle to understand and use their health insurance, health insurance costs rise.

Working across health insurance programs — Medicaid, Medicare, the Children’s Health Insurance Program (CHIP) and state exchanges — we have found that young adults, minorities, immigrants, the LGBT community, veterans, people with lower incomes and those with less education have more difficulties navigating health insurance. Unfortunately, these populations also tend to be uninsured or underinsured, be hard to reach, and experience significant barriers to care. These vulnerable populations need programs that help them understand health insurance concepts and provide a safe space for them to access care.

A good example is Housing Works, a housing program in New York City for HIV-positive adults. As a Federally Qualified Health Center, Housing Works helps clients enroll in health insurance. The program matches clients to case managers who assist them with housing, behavioral health, transportation and other services. The case managers provide individual care to the client and explain the various health plans based on the client’s HIV status. Clients are also enrolled in an HIV suppression program to keep them undetectable. Programs like this increase the clients’ understanding of their disease and show them how enrolling in the correct plan can help achieve long-term success in disease management.

Based on our success in working with hard-to-reach, vulnerable populations, here are several recommendations to improve health insurance literacy:

  • Meet consumers at their greatest area of need. Partner with housing organizations, social services, churches and other community-based organizations.
  • Recruit individuals directly from the population to help facilitate conversations. This is particularly helpful for non-English speaking populations.
  • Educate and train local leaders in different communities on health insurance options.
  • Tailor outreach materials and resources to the different populations. Use examples and images that are relevant to the community.
  • Use methods of communication that speak to the different populations. For example, studies show that short text messages increase consumers’ understanding of health insurance.

By improving health insurance literacy, we can ensure that consumers have access to the information they need to make informed decisions on plans that will meet their individual health care needs. As we move into the next ACA open enrollment period, improving health insurance literacy should be at the forefront of every campaign — enabling us to connect with hard-to-reach, vulnerable populations.

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