18 Nov 2014
Fact Sheet

AIR Index: Health Insurance Literacy in America

Couple reviewing papersMillions of Americans got health coverage this year under the 2010 Affordable Care Act—many for the first time. But consumers who struggle to understand how their insurance works are at risk of forgoing needed care. To understand in which areas Americans need more assistance and education, AIR designed the Health Insurance Literacy Measure survey. In a recent survey of 800 participants, AIR found that young adults, those using fewer healthcare services, traditionally disadvantaged populations, people with lower incomes, and those with less education have more difficulties navigating health insurance.

Likelihood of an American reporting confidence in his or her ability to use health insurance: 3 in 4

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Likelihood of an American to correctly calculate what he or she owes for a routine doctor’s visit: 1 in 5

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Percentage of individuals only “somewhat likely” or “not at all likely” to review a plan’s details before signing up for coverage: 42

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Percentage of individuals likely to check which hospitals and doctors an insurance plan covers: 21

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Percentage of people who know what the insurance term “premium” means: 81

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The term “medically necessary”: 60

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The term “step therapy”: 37

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Portion of individuals who could identify general characteristics of an HMO (health maintenance organization): 1/2

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Of a PPO (preferred provider organization): 1/5

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Percentage of items individuals aged 22–34 answered correctly: 55

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Percentage of items individuals aged 55–64 answered correctly: 64

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Percentage of items correctly answered by individuals with annual incomes of $75,000 or more: 67

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By individuals who earn less than $25,000 a year: 45

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Percentage of items participants with a bachelor’s degree or higher answered correctly: 68

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By participants with less than a high school degree: 32

 

Source: A Little Knowledge is a Risky Thing: Wide Gap in What People Think They Know About Health Insurance and What They Actually Know (2014)

Related Projects

Project

Measuring Health Insurance Literacy

Health insurance coverage is key to accessing affordable, high-quality care. But do most Americans have the knowledge and skill they need to navigate or get the most out of their insurance plans? To answer this question, AIR researchers developed The Health Insurance Literacy Measure©, which consists of 21 self-report questions assessing self-confidence and behaviors associated with choosing and using health insurance.

Related Work

20 Feb 2013
Brief

Developing a Measure of Health Insurance Literacy: Understanding Consumers’ Ability to Choose and Use Insurance

This issue brief describes the findings from interviews with health insurance counselors and other stakeholders about problems consumers face in selecting and using health insurance. It also lays out a strategy to develop an important new tool: a measure of health insurance literacy.

14 Oct 2014
Report

Development of the Health Insurance Literacy Measure (HILM): Conceptualizing and Measuring Consumer Ability to Choose and Use Private Health Insurance

Understanding health insurance is central to affording and accessing health care in the United States. Efforts to support consumers in making wise purchasing decisions and using health insurance to their advantage would benefit from the development of a valid and reliable measure to assess health insurance literacy. This article reports on the development of the Health Insurance Literacy Measure, a self-assessment measure of consumers' ability to select and use private health insurance.

Further Reading