Healthcare Insurance Literacy Vital for Higher Coverage Rate
Research shows that individuals with higher levels of healthcare insurance literacy will be more likely to be insured.
By - New research from the RAND Corporation shows that uninsured Americans who have better healthcare insurance literacy were more likely to purchase coverage when the Affordable Care Act’s health insurance exchanges opened in 2014, according to a company press release.
The study from the Rand Corporation was published in the Medical Care journal and looked at rates of coverage comparing it to healthcare insurance literacy among consumers. The research findings illustrate that the average person without health insurance in 2013 was 9.2 percent more likely to purchase medical coverage by 2015 if they had high healthcare insurance literacy when compared to people with lower levels of health literacy.
“Limited health insurance and financial literacy may make it difficult for consumers to assess whether insurance premiums are ‘worth it’,” Katherine Carman, Senior Author of the study and an Economist at RAND, said in the press release. “Efforts to decrease the number of uninsured adults should consider that these individuals may have a hard time deciphering health insurance information.”
The researchers took account of other varying factors that could impact a person’s decision on whether or not to purchase coverage despite the potential tax penalty. The exclusionary factors include employment, income level, and political affiliation.
“It is remarkable that the association between financial literacy and people’s insurance decisions is similar in size to things we normally associate as being a key to someone having health insurance, such as education levels and whether someone is employed,” Carman continued.
Some other potential consumer habits and factors that lead to whether or not someone has high levels of health literacy include education level, smoking habits, income, and patient portal use.
These type of findings from the Rand Corporation study can play a major role in helping healthcare payers learn more about consumers and develop ways to improve healthcare insurance literacy as well as patient engagement. The lower the uninsurance rate is within the United States, the fewer healthcare costs will be spent on treating severely ill patients.
Often uninsured individuals wait until their medical concerns worsen and then end up in emergency rooms or hospital beds. As such, the costs for medical care among the uninsured population is higher than those who visit a primary care doctor when a concern pops up.
The researchers followed nearly 3,000 consumers from 18 years of age to 64 years old who took part in the RAND American Life Panel. Questionnaires were included to test how well the participating individuals understood health insurance topics. Both financial and healthcare insurance literacy was determined among the survey takers.
Additionally, the researchers looked at the health insurance status of these individuals in the fall of 2013 and, again, during the spring of 2015. The Affordable Care Act exchanges opened up at the end of 2014, which gave all Americans the opportunity to purchase health insurance and meet the individual mandate.
Healthcare payers will need to address patient literacy and ensure that their consumers are better educated in order for them to make the right decisions when choosing health plans and potentially help reduce rising medical costs.
“Because the ACA relies on consumer choice, those who are uninsured and have low health insurance literacy represent a particularly vulnerable population because obtaining coverage may be especially difficult for them,” Carman explained.
The results show 64 percent of uninsured individuals with high healthcare insurance literacy had gained coverage by 2015 while only 48 percent of those with low literacy levels purchased a health plan by the beginning of last year. As for high financial literacy, 70 percent of uninsured individuals purchased coverage by 2015, which was a 14 percent increase from those with low financial literacy.
Both public and private payers will likely need to invest more into improving the healthcare insurance literacy of consumers in order to keep robust enrollment numbers on a yearly basis.
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