Before receiving a driver’s license, those who undergo this rite of passage must first receive driver’s education that prepares them for the challenges of the road. Yet there is no similar educational prerequisite that prepares healthcare consumers for using health coverage before receiving their health insurance ID cards.

Just as an uneducated driver is more likely to be involved in a mishap on the road, a healthcare consumer who does not understand health insurance is at greater risk for adverse financial and/or clinical consequences when navigating the complex and evolving healthcare landscape.

An uninformed consumer may receive an unexpected bill after unwittingly seeking care from an out-of-network physician, for example, or neglect to establish a relationship with a primary care physician, who typically plays a critical role in patient care coordination and prevention.

A new white paper by FAIR Health entitled, Improving Health Insurance Literacy in the State of Connecticut: Lessons from the FAIR Health Engage Health CT Program, offers a view into the widespread lack of health insurance literacy (HIL)—a basic understanding of how to shop for, select and use a health plan —among healthcare consumers.

Connecticut has had substantial success in insuring its residents, with more than 700,000 individuals enrolled through the Access Health CT health insurance marketplace since 2013 as a result of the Affordable Care Act (ACA). But, as reported in the white paper, focus groups conducted by FAIR Health and the Hispanic Health Council in connection with FAIR Health’s Engage Health CT initiative, (funded by a generous grant from the Connecticut Health Foundation,) showed that the newly insured and uninsured, particularly African Americans and Hispanics, had low levels of health insurance literacy.

Unprepared to use health insurance and healthcare effectively, the focus group participants recognized their need for more information. One recently insured man said he knew “nothing” about health insurance and needed to learn “everything.”

The focus group results are consistent with national survey findings in 2016 that showed that consumers desire HIL education earlier in life: 76 percent of respondents indicated that an understanding of health insurance plans should be acquired before or during high school or college.

Another national survey found that African Americans and Hispanics were more likely than the total population to use the emergency room (ER) for non-emergency care. Unnecessary ER use is more expensive than care delivered in alternative settings and is more likely to disrupt care coordination, just one example of how low health insurance literacy can affect consumers adversely both financially and clinically.

The Engage Health CT initiative launched a free mobile app last fall, FH® Cost Lookup CT, which enables Connecticut residents to estimate costs for medical and dental services in their areas, and provides state-specific information on health insurance and the healthcare delivery system.

The app is intended to improve health insurance literacy by delivering reliable cost information and health insurance education through a mobile interface, which, as research indicates, is the means most often used by lower-income and minority groups to access information from the Internet.

Ironically, the current level of health insurance literacy limits the effective use of the app. For example, the app equips consumers with cost estimates that they can use to discuss constructively healthcare prices with their providers and potentially negotiate a lower price. But, most focus group participants did not know that such discussions were even possible.

The white paper emphasizes that much work remains to be done to advance health insurance literacy in Connecticut and, by extension, nationwide. It concludes by proposing three areas of focus for addressing health insurance literacy.

First, age-appropriate, standardized curricula could be developed to teach health insurance basics to students as early as high school or college. Second, educational content could be developed and made available in community-based settings, to be delivered by staff during appointments and events related to health, coverage enrollment and the delivery of social services. And third, in-person educational efforts could be coupled with free mobile and web-based tools that promote consumer engagement in navigating the healthcare system.

The future of the ACA may be in question, but health insurance is here to stay, and consumers need to “buckle up” and gain higher levels of health insurance literacy to make the most of it. Driver’s ed for health insurance may help make that possible.

Robin Gelburd, JD, is the president of FAIR Health, a national, independent nonprofit with the mission of bringing transparency to healthcare costs and insurance reimbursement. FAIR Health oversees the nation’s largest repository of private healthcare claims data, comprising over 22 billion billed medical and dental charges that reflect the claims experience of over 150 million privately insured Americans. 

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