The Link Between Health Insurance Literacy and Member Care

April 23, 2020 HMS

Health insurance literacy is an issue in America. Five years ago, the Kaiser Family Foundation found that only 4% of people could correctly answer a ten question survey about health insurance terms and concepts.

This begs the question: Is a lack of health insurance literacy linked with negative health behaviors? A JAMA Network study suggests that this is the case. In February 2016, 506 U.S. residents participated in an online survey. These individuals were 18 years old and older, and they had current health insurance coverage. The findings suggested that opportunities exist for health plans to educate members about health insurance basics.

Consider the survey results:

  • Nearly one third (29.6%) of respondents indicated that they had delayed or foregone healthcare due to the cost in the past 12 months. Those with higher levels of insurance literacy were less likely to delay or avoid preventive and non-preventive care.
  • Low levels of health insurance literacy are more common among individuals with low socioeconomic status, racial or ethnic minorities, and people who were previously uninsured.
  • Individuals with high deductible health plans had higher levels of avoidance of preventive and non-preventive care.

To address these issues, the study authors suggested that health plans should develop simple communications to make important health insurance concepts more accessible. They also recommended engaging individuals and educating them that recommended preventive services are exempt from out-of-pocket costs.

These types of communications are more important than ever, now that the nation is facing the COVID-19 pandemic. Many people are unaware of what services are available to them, if they suspect they may have contracted the illness or even if they develop other medical issues that need attention.

New member onboarding programs are a great opportunity for plans to answer basic questions such as:

  • Whether there is a premium payment, when it is due, and how it gets paid
  • What the copays are and whether there is a deductible
  • How members maintain coverage
  • Whether members need to renew once a year
  • Whether members need to attest to working or volunteering each month

Onboarding is also an ideal time to educate members about the importance of having a primary care physician, what telehealth services are available if communities are sheltering in place, and when to use urgent care. HMS’ health engagement solution helps health plans reach out to members using multi-modal communications such as email, text message, IVR phone calls, and direct mail. These campaigns can be tailored to each member’s communication preferences. In addition, messages can be provided in Spanish – these are always based on cultural considerations, not just direct translations.

Member communication throughout the year is a great way to stay on top of members’ health issues, as well as the best ways to reach them. This is particularly important for Medicaid beneficiaries who tend to move more often than others. A recent article in Kaiser Health News reported that in Colorado alone, 15% of 12 million letters from public assistance programs never reach the intended recipients and are returned. This same dynamic occurs throughout the United States and it’s likely a contributor to decreases in Medicaid enrollment. Experts suggest that individuals dropped from Medicaid rolls often aren’t even aware of the problem until they go to seek care.

With member permission, HMS Eliza enables health plans to reach out via text message or email with important information. For a Medicaid member, this could mean the difference between losing coverage and staying on track with important health services.

Communicating proactively with members can not only improve health insurance literacy, it can also break the cycle of negative health behaviors and Medicaid churn.


To learn more about best practices for member onboarding and retention, download our white paper “You Had Me at ‘Hello.'”

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