Understanding Health Insurance Literacy: A Literature Review

Abstract

The 2010 Affordable Care Act changed health insurance plans for both the insured and uninsured. Currently insured consumers need to understand changes that impact their purchase decisions, and newly eligible consumers need to understand how to purchase through the new health insurance marketplace. Health insurance literacy is a new concept that addresses the extent to which consumers can make informed purchase and use decisions. Consumers currently exhibit limited health insurance literacy. Researchers and educators need a comprehensive review of the literature and existing curriculum and materials to conduct research and to create and test educational programs that could increase health insurance literacy. This article provides a review of relevant literature and curricula. It offers implications for additional research, measurement of health insurance literacy, and development of educational programs to improve health insurance literacy in the United States.

Building Health Insurance Literacy: Evidence from the Smart Choice Health Insurance™ Program

“…A higher percentage of men (by a margin of 4 percentage points) than women had Below Basic health literacy'' (Kutner et al 2006, p. 10). Health insurance literacy is a component of financial literacy (Kim et al 2013). Our findings are contrary to the gender-based differences that have emerged in the study of financial literacy, with females typically faring slightly worse with financial literacy compared to men (Bucher-Koenen et al 2014;Lusardi and Mitchell, 2008).…”

“…By increasing health insurance literacy, consumers can make more optimal decisions which could ultimately lead to improved health outcomes (Kim et al 2013;Loewenstein et al 2013). The findings from the current study can be used to identify specific populations who may have greater gains in health insurance literacy at the end of a program, or alternatively, identifying those at risk for not achieving gains in health insurance literacy at the end of an educational program.…”

“…For these reasons, health insurance literacy is essential to the well-being of American families (Kim et al 2013). Possessing a high level of both health and financial literacy is necessary, given the complexity of the marketplace, the abundance of choices in coverage, and the required understanding of individual family and health needs as well as financial considerations.…”

“…Several studies suggest that consumers want to better understand health insurance terminology, plan costs, and the details of their health insurance benefits (Consumers Union 2011;Kim et al 2013;Sinaiko and Hirth 2011). Most American adults (75 %) were moderately or very confident they knew how to use health insurance, yet when presented with a cost-sharing scenario only 20 % could estimate the correct cost of a doctor's visit (Paez et al 2014).…”

“…The Health Reform Monitoring Survey found that 61 % of consumers who were still uninsured after the first open enrollment period had heard ''little'' or ''nothing'' about tax credits or cost-sharing subsidies introduced by the ACA (Dorn 2011). In addition, success of health care reform is attributable, at least partially, to consumers' health insurance literacy (Paez et al 2014 Kim et al 2013;Loewenstein et al 2013). Together, these findings present an opportunity to increase awareness and understanding of the ACA and to address health insurance literacy.…”