By Nicholas S. Imperato DO, MPH and Kamini Doobay MD, MS
Before we begin developing programs to improving health insurance literacy levels throughout the country, we must first understand the ramifications of poor health insurance literacy levels on health, as well as physical and financial well-being. Health insurance literacy garnered greater attention with the passage of the Patient Protection and Affordable Care Act, as large portions of Americans became newly insured. Now, there was a new group of individuals who would be tasked with navigating the health insurance marketplace, in search of a health plan that suited their specific needs. While it was beneficial that fewer individuals would be uninsured, this monumental shift in our healthcare system did bring about new, potentially unforeseen obstacles to overcome.
To understand why these detrimental effects of poor health insurance literacy are important, we must recognize how widespread it is. Thankfully, there have been a variety of articles which specifically studied levels of health insurance literacy in different patient populations. In Hispanic communities, two studies have shown that overwhelming majorities (93% and 70%, respectively) of this demographic have limited understanding of their health insurance plans (Ghaddar et al., 2018, Edward et al., 2018). Other studies in cancer patients indicated that majorities of patients had limited understanding of health insurance terms, or which factors were most important when choosing plans (Williams et al., 2020). When the Kaiser Family Foundation distributed a 10-question health insurance survey, it revealed there were overwhelming deficits identified in patients’ ability to calculate out-of-pocket costs or define insurance terms (Norton et al., 2014).
Studies have identified that limited understanding of health insurance was associated with a higher likelihood of individuals being underinsured or choosing “sub-optimal” plans. Additionally, these individuals were less likely to ever change their insurance plans, even when they provided inadequate coverage (Holst et al., 2023). Lacking adequate coverage may then place patients at significantly higher risk of being unable to find providers or facilities that fit their health needs, potentially paving the path for them to unknowingly incur large amounts of medical debt. Financial hardships can then bring about undue burden and stress, leading to a detrimental impact on ones’ overall well-being.
Patients have also been shown to have limited understanding of the most basic health insurance terms (e.g. premium, co-pay, coinsurance, deductible, out-of-pocket maximum), then realistically, there is little likelihood that they will ever be able to accurately plan for or estimate potential costs of health services that they will receive (Patel et al., 2020). It has been shown that only roughly 50% of patients are able to correctly calculate out-of-pocket costs for services they receive (Levitt, 2015). This limited understanding forces patients to place excess emphasis on factors such as premiums or out-of-pocket maximums, which are often not the best factors to focus on when selecting a plan (Levitt, 2015). While having coverage is an important (albeit monumental) first step, understanding how to utilize that coverage is equally important.
While poor health insurance literacy leads to delays in care or completely forgoing needed care, it has also been shown to lead to a lack in adherence to medication regimens (Tipirneni et al., 2018). Likely, this is due to a limited understanding of what out-of-pocket costs will be for patients, when they are purchasing their medications, leading to a fear of high costs (Morgan et al., 2008; Piette & Heisler, 2006). Health insurance impacts all facets of healthcare and, importantly, impacts the way in which patients interact with the healthcare system. Poor literacy levels will lead to worsening morbidity and mortality, as patients are less likely to pursue preventive care, be adherent to treatment plans, and incur unnecessary stress due to financial hardships.
Nicholas S. Imperato, DO, MPH is an Emergency Medicine resident physician at Rutgers New Jersey Medical School and Kamini Doobay, MD, MS is an assistant professor of Emergency Medicine at Rutgers New Jersey Medical School.
References:
Edward, J., Morris, S., Mataoui, F., Granberry, P., Williams, M. V., & Torres, I. (2018). The impact of health and health insurance literacy on access to care for Hispanic/Latino communities. Public Health Nursing, 35(3), 176–183. https://doi.org/10.1111/phn.12385
Ghaddar, S., Byun, J., & Krishnaswami, J. (2018). Health insurance literacy and awareness of the Affordable Care Act in a vulnerable Hispanic population. Patient Education and Counseling, 101(12), 2233–2240. https://doi.org/10.1016/j.pec.2018.08.033
Holst, L., Brabers, A., Rademakers, J., & de Jong, J. D. (2023). The role of health insurance literacy in the process and outcomes of choosing an insurance policy. European Journal of Public Health, 33(Supplement_2), ckad160.249. https://doi.org/10.1093/eurpub/ckad160.249
Levitt, L. (2015). Why Health Insurance Literacy Matters. JAMA, 313(6), 555–556. https://doi.org/10.1001/jama.2014.17419
Morgan, R. O., Teal, C. R., Hasche, J. C., Petersen, L. A., Byrne, M. M., Paterniti, D. A., & Virnig, B. A. (2008). Does Poorer Familiarity with Medicare Translate into Worse Access to Health Care? Journal of the American Geriatrics Society, 56(11), 2053–2060. https://doi.org/10.1111/j.1532-5415.2008.01993.x
Norton, M., Hamel, L., & Brodie, M. (2014, November 11). Assessing Americans’ Familiarity With Health Insurance Terms and Concepts. KFF. https://www.kff.org/health-reform/poll-finding/assessing-americans-familiarity-with-health-insurance-terms-and-concepts/
Patel, M. R., TerHaar, L., Smith, A., Tariq, M., Worthington, K., Hinton, J., & Lichtenstein, R. (2020). Knowledge of Health Insurance Terms and the Affordable Care Act in Racially and Ethnically Diverse Urban Communities. Journal of Immigrant and Minority Health, 22(3), 456–466. https://doi.org/10.1007/s10903-019-00924-3
Piette, J. D., & Heisler, M. (2006). The Relationship Between Older Adults’ Knowledge of Their Drug Coverage and Medication Cost Problems. Journal of the American Geriatrics Society, 54(1), 91–96. https://doi.org/10.1111/j.1532-5415.2005.00527.x
Tipirneni, R., Politi, M. C., Kullgren, J. T., Kieffer, E. C., Goold, S. D., & Scherer, A. M. (2018). Association Between Health Insurance Literacy and Avoidance of Health Care Services Owing to Cost. JAMA Network Open, 1(7), e184796. https://doi.org/10.1001/jamanetworkopen.2018.4796
Williams, C. P., Pisu, M., Azuero, A., Kenzik, K. M., Nipp, R. D., Aswani, M. S., Mennemeyer, S. T., Pierce, J. Y., & Rocque, G. B. (2020). Health Insurance Literacy and Financial Hardship in Women Living With Metastatic Breast Cancer. JCO Oncology Practice, 16(6), e529–e537. https://doi.org/10.1200/JOP.19.00563