A common refrain from Americans is that health insurance is too hard to understand.
Most people reach adulthood without a formal introduction to health insurance terms and concepts, meaning even highly educated adults are frequently under-informed about how their health insurance functions. Often, it’s a benefit provided to employees with little accompanying guidance on how to use it. And few human resources teams have time to field every insurance question their employees may have or take time to explain how their health plan works.
“Members not fully understanding the vocabulary and rules of how health insurance works is a challenge our entire industry is facing,” said Lynette VanDyke, manager of large group markets at Arkansas Blue Cross and Blue Shield. “We chose to tackle it head on by increasing our educational resources available to members, starting with a member-focused Guide to Understanding Your Insurance we published in the fall. The feedback we’ve gotten so far from our groups is that people really appreciate having the concepts explained in plain language.”
In one study, only 9% of Americans could define four basic health insurance terms: health plan premium, health plan deductible, out-of-pocket maximum and co-insurance. In that same study, 60% of respondents wrongly answered that visiting an in-network provider would increase their costs or have no effect on costs.
But not understanding health insurance is costly to employees and to their employers. A recent Health Insurance Literacy Survey from healthcare.com found 26% of Americans report that not understanding their health insurance better caused them to have higher medical bills. Another study found that people who don’t understand their health insurance are more likely to make emergency department visits, have inpatient stays, experience higher mortality rates and be less compliant with their treatment regimens.
The urgency of health insurance education
Given these statistics, it becomes clear how important it is to provide your workforce with materials to explain basic insurance terms and concepts including how to navigate their care, how to find the information they need and what to expect from their health plan’s coverage.
VanDyke said the following are questions your health plan members should be comfortable answering:
- Who needs health insurance and why?
- How and where do we get health insurance?
- When do we get health insurance?
- What does “in-network” mean?
- What are premiums, copays, co-insurance, deductibles and out-of-pocket maximums?
- How does health insurance work and how much does it cost?
- How do we use our member ID cards?
- What is ancillary coverage?
- Is preventive care covered?
- Who do we ask when we have questions about our health plan?
“The intricacies of individuals’ insurance claims and coverage sometimes can be complex even when the broad concepts are understood,” she said, “but not having a common vocabulary to explain claims decisions, in-network providers and coverage details makes everything harder and more bewildering for the person needing to use their health insurance to access care.”
Never too late to educate
No matter your insurer, people covered on your plan should be able to contact a customer service representative for help explaining these things. But when medical needs arise, questions about the mechanics of health insurance often get put off. Still, VanDyke said it’s never too late to help people understand better how their health insurance works and how to get the most value out of it. Here are some steps you can take to help employees understand your health plan better:
- Survey your workforce to determine how many of them struggle with understanding their insurance.
- Invite someone from your health plan to make a presentation or give a webinar your employees can attend and ask questions.
- If your health plan has a self-service member portal or app, request help educating employees about how to use the tools to maximize their benefits and keep track of their medical expenditures.
- Ask your insurer for health insurance educational materials, not just about various programs but about the basics members need to understand. These materials could include a guide, flyers, videos, articles, social media content or other formats that should be available for digital distribution or printing.
- Incorporate the materials you receive from your health plan into your employee onboarding process so every new employee has the information from the start.
“Understanding how their health plan works can not only empower members, it can save them — and their employer — significant money and increase the value they get in terms of costs and better health outcomes,” VanDyke said.
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