HR.com: Closing The Health Care Literacy Gap With Education And Personalization
It’s certainly not news that employees are struggling with health care. Rising costs, new plan options and supplementary programs, a steady stream of new medications and treatments—and now the COVID-19 pandemic—have left employees confused about their options for coverage and treatment. More than one-quarter (27.2%) of respondents in a new Policygenius survey have avoided care or treatment because they were unsure of what their health insurance covered.
While most employers provide at least basic benefits education at open enrollment, the diversity of today’s workforce requires more targeted, individualized support to ensure that employees are getting the right information at the right time, and to drive a more cost-conscious approach to choosing and using health care. But what, exactly, does that involve?
Earlier this year, DirectPath surveyed 1,050 people with employer-sponsored insurance to identify the root causes of the health care literacy gap and what individuals require to manage health care in a smarter, more cost-conscious way. The survey findings showcase how inadequate benefits education makes it difficult for employees to make informed health care choices and to control health care spending.
Where Employees Are Getting Their Information
According to the survey results, 40% of respondents say they taught themselves about health insurance terms and processes. Another 33% are turning to family, friends, acquaintances, or coworkers for education. This DIY education is unreliable. Any source material found online may be outdated or inaccurate, and advice from even the most well-intended peer or loved one will be based on that individual’s own needs and experience with, and often limited knowledge of, benefits. People need information that is catered to their personal health needs and their specific health plan options.
The DirectPath study showed that respondents feel confident they understand terms related to the core elements of a health plan, such as copay (90%), deductible (85%) and out of network (83%). However, far fewer are certain about how those and other concepts such as coinsurance (29%), premium (25%) and allowed amount (26%) apply to their coverage. Yet other surveys show that this assessment might be optimistic—in one such survey by PolicyGenius, only 4% of Americans could correctly define basic terms such as deductible, copay, coinsurance and premium. This literacy gap directly impacts individuals’ finances—a 2018 report indicated that premiums and deductibles now represent more than 11% of Americans’ median income. To help employees reduce this financial burden, employers need to take the initiative to improve health care literacy.
How Employers Can Support Benefits Education
When it comes to health care benefits education, leaving it up to the employee clearly isn’t getting the job done. Employees are increasingly asking for personalized support: DirectPath’s survey shows that 45% of respondents say more personalized benefits education would improve their health care insurance understanding. Yet only half of employers (54%) today are offering one-on-one benefits education, according to respondents. Further employers are seen as a trusted source for health information—for example, the 2020 Edelman Trust Barometer showed that “my employer” was the most trusted institution for information about the coronavirus.
How can employers start providing this level of support—especially with their HR teams already pulled in so many directions? With changes brought on by the COVID-19 pandemic, it has become a bit more complicated. In-person meetings are no longer practical, and printed materials can’t address individual needs. To compensate for these barriers, employers should consider adding year-round educational services, along with open enrollment support, staffed by benefits experts. Such one-on-one services—often provided telephonically—can help reduce the likelihood of poor decision-making as employees choose, and use, their coverage. More than two-thirds of respondents who have had these one-on-one conversations rate them “very” or “extremely” helpful.
Why Invest in Personalized Benefits Education
Benefits education has an impact on the employer’s bottom line as well. In 2018, employers were contributing 72% of the cost of family coverage, and 79% of the cost of single coverage, for their employees. When employees select a richer plan than they need—which may carry a higher premium—both employee and employer pay more than necessary. For self-insured plans, employee choices about where and when they receive care have a similar impact—the higher the cost of the service, the more the plan and the participant pay. Better, and more comprehensive, benefits education—specifically through one-on-one support—helps individuals understand their health plan, which is the only way to know how to use it effectively.
But benefits education must extend beyond bare facts—just knowing they can reduce health care spending, for example, is not enough to drive employee behavior. To encourage smart benefits use, employers must communicate how valuable it will be for the individual (i.e., “what’s in it for you?”). Employers should focus on three objectives to drive employee engagement:
- Encourage use of network providers. Ninety-six percent of respondents have a health plan that uses a network, and almost all (95%) say they know how to check if a medical provider or facility is in network. However, 41% of respondents say they only “sometimes,” “rarely,” or “never” check. While this could be because they’ve used the same providers for years, employees may be surprised to find that their providers are no longer in business post-COVID, necessitating a search for a new doctor. Employers need to remind employees that their share of the cost for a visit could increase 10-20% or more—or that the visit might not be covered at all—when they go out of network. Equipped with this knowledge, employees may start checking network status more regularly.
- Drive cost comparisons. According to the DirectPath survey, 67% of respondents did not know they could compare treatment or service costs from different providers or prescription drug prices across pharmacies. This practice is critical in determining how to get the best quality care at the best price. In fact, 31% of respondents who did compare costs reported saving $500 or more on a single service or treatment.
- Review and manage health care bills. Many respondents who received an unexpected medical bill did not take steps to resolve it. Why not? Forty-one percent say they didn’t know how to correct the bill, and 55% say they didn’t feel it was worth the effort to fix it, even if they knew how. This inaction can cost employees and their employers hundreds, if not thousands, of dollars.
If employers want to help employees choose and use their health care benefits more wisely, they must avoid “one size fits all” materials and tailor information to the individual. By investing in personalized benefits education, advocacy and transparency services that demonstrate the personal financial impact of benefits decisions, employers can educate and support employees at every stage of their health care journey – from understanding their plan options during open enrollment to asking questions related to providers and billing when they need to visit a doctor. These programs equip employees to become smart, savvy health care consumers, which benefits employees – and employers, in more ways than one.
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(Kim Buckey is vice president of services at DirectPath)