Prioritize Health Literacy This Open Enrollment

October was Health Literacy month. If you missed it, you’re not alone. In the United States, being health literate is about as common as having a master’s or doctorate level education. Only 12% of Americans are proficiently health literate, meaning the vast majority of us lack the capability to process and retain health information and make informed health decisions. And this has real consequences; low health literacy is associated with high rates of healthcare spending, and even worse, more frequent hospitalizations.

As we enter the third open enrollment period, health literacy will play a pivotal role in allowing people to not only get covered through a health insurance plan, but also understand how to use it to optimize their health care. Yet understanding a health plan is complicated; understanding your premium and its relationship to your deductible, calculating your out-of-pocket costs, and knowing where and when you can use your insurance doesn’t come naturally to most. In fact, a recent study found that the vast majority of millennials couldn’t calculate the costs of their plan while 50% couldn’t define what “deductible” meant. Wellthie decided to discover the state health literacy on the streets of New York, documented in the video below:

In this video we asked New Yorker’s to define common health insurance terms. We’ve also defined these terms with examples below for reference:

1. Premium: the amount you pay per month for health insurance coverage

Example: Most individuals will pay a premium under $100 per month for their marketplace health plan thanks to tax credits.

2. Deductible: the amount you’re responsible for paying before your insurances starts paying for health services.

Example: The average 2015 marketplace deductible for a silver plan was $2,563, meaning you would need to spend $2,563 on health care services until your insurance pays.

3. Copay: a flat fee you pay for medical services

Example: Since in the Affordable Care Act passed, preventive services have a $0 copay. So now you can get your flu shot at no cost!

4. Coinsurance: the percentage of the bill you pay for medical services

Example: If your plan details say that you have 30% coinsurance on visiting a specialist, your insurance will pay for 70% of the visits cost. It pays to shop around for the best value (price and quality) from health care providers.

5. HMO: a type of plan that limits coverage to care from doctors who work for or contract with the HMO.

Example: HMO’s, like Kaiser Permanente, generally do not cover out-of-network care, but consumers save money when accessing these providers.  

6. PPO: a type of plan that contracts with medical providers to create a network with broad choice of providers. Benefits are available in and out of network, but you pay less to use the contracted in-network providers.

Example: A PPO is generally the least restrictive type of plan since you have a broader choice of doctors you want to see, but they often come with a higher premium.

For a comprehensive health literacy quiz, take Kaiser Family Foundation’s Health Insurance Quiz and to learn more about your health insurance, read our article “5 Things to Consider When Choosing a Health Plan.” Don’t be caught unprepared this open enrollment. Prioritize health literacy, get covered, and be healthy.

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