Two Stories That Illustrate Why Health Insurance Literacy Matters

By Sophie Stern

How can getting information about health insurance — at the right times, through the right tools, and from the right messengers — make someone who’s gotten covered more likely to stay covered?

How can the enrollment community help support consumers so that they can avoid the negative consequences of limited health insurance literacy, such as buyer’s remorse or loss of coverage completely?

See the illustrative examples below that are based on actual 2015 marketplace health plans available in Hillsborough County, Florida:

Icon-x-whiteManuel dropped his marketplace coverage mid-year.Icon-Manuel

In 2014, with help from a tax credit, Manuel enrolled in a marketplace plan for $84 per month with a $6,300 deductible. Manuel picked the plan with the lowest premium in his area. However, he did not know that he should also look at the amount of the deductible, and he later learned that his prescriptions were not covered until after his $6,300 deductible was met. With his income (sporadic and seasonal), it was very difficult to afford his premium and the costs of his prescriptions entirely out of pocket before the deductible. He stopped paying premiums mid-year because he did not see the value in paying for something he could not use right away. Manuel did not enroll in coverage for 2015.

Icon-check-whiteTanisha got covered and stayed covered.Icon-woman

On the other hand, Manuel’s friend Tanisha purchased a marketplace plan with a premium of $73 per month and a $0 deductible, also with the help of a tax credit. Tanisha sees a dermatologist every six months and is interested in seeing a therapist. Tanisha is a full-time graduate student, and with only a part-time job, she could not afford to pay a lot out of pocket for specialist doctor visits. With help from an in-person assister, she selected a plan with no deductible that covered the services she needed and created a monthly budget to figure out what she could afford. During the year, Tanisha received guidance on how to use her coverage through a text message program that she subscribed to through her school, which helped her understand the importance of finding an in-network provider. The majority of her mental and physical health care was covered in 2014, saving her money over the course of the year. In December 2014, Tanisha knew that she needed to go back to the marketplace to explore her options during open enrollment because of several email and phone call reminders from the assister that originally helped her. Tanisha used an online plan comparison tool and found coverage with a lower premium and comparable deductible that would meet her health care needs and budget for 2015.

Generally speaking, people do not need to be health insurance experts to purchase and retain coverage, but like Tanisha in the example above, they do need effective tools and resources at the appropriate times to make informed decisions so that they can maintain their coverage over time. Or they could end up like Manuel, dissatisfied with their coverage and at risk of losing it.

These examples are drawn from our latest issue brief: A Framework on Health Insurance Literacy for the Outreach and Enrollment Community. Read the brief to learn more about health insurance literacy from the consumer perspective — when, how, and from whom consumers want to receive information on health insurance and how it works.

You can also register for Enroll America’s 2015 National Conference, June 10 – 12 in Washington, D.C., to attend various workshops on health insurance literacy, including sessions to help stakeholders apply the five-point framework to their programming in preparation for OE3 — sign up to register today!

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