The lack of accessible and affordable health insurance is a well-documented problem in American healthcare. According to the CDC, as many as 30 million Americans are currently uninsured. And while this negatively affects health systems in a variety of ways, less is discussed of the lack of health insurance literacy and understanding among those who are insured. In one of our recent surveys, we found that just 28% of insured consumers felt they had a strong understanding of which healthcare services were covered by their health plans.
Patients who lack understanding of their coverage can experience significant disruptions to their ability to seek or receive care. Many of these patients put off treatment or avoid important care because they mistakenly believe it isn’t covered by their insurance. Other patients may undergo expensive treatments only to realize that they owe out-of-pocket charges after misunderstanding their coverage.
The issue of a lack of health insurance literacy and understanding has been exacerbated by the events of 2020 and 2021. The COVID-19 pandemic of 2020/2021 caused national unemployment to reach levels not seen since the Great Depression. Because health insurance is often tied to one’s employment, this meant that millions of Americans lost health coverage in the middle of a public health crisis. And then in 2021, there was a record number of Americans leaving their jobs. This means that millions of Americans are now navigating new health insurance policies, often with little understanding or knowledge of how their coverage works.
With so many patients experiencing a disruptive coverage event, it’s vitally important for healthcare organizations to understand the current environment. We’ve outlined four strategies that can help you convert a time of great uncertainty into one of opportunity.
Proactively help patients understand their insurance and coverage
When it comes to your patient’s health insurance literacy and coverage awareness, be proactive and make preemptive efforts to engage and discuss options. In our survey we found that just 28% of consumers say that they have discussed what healthcare expenses their plan covers with their provider. As medical institutions begin to recover from decreased volumes in their operating rooms, emergency rooms and inpatient units during the pandemic, their revenue team’s ability to direct patients to informed treatment plans and care will be critical.
Be sure that each of your patients understands key terms such as deductible, out-of-pocket maximum or allowed amount. Define each of these terms on billing statements and take the time to explain each term thoroughly with your patients. Not only will this increase patient confidence and total treatments, but it will also improve the overall patient experience.
Take transparency seriously
Transparency is a growing concern for patients and consumer advocates. Recent price transparency rules took effect in January 2021, mandating that providers post charges for 300 shoppable services in a consumer-friendly format as well as share their payer-negotiable rates or cash prices for services. Unfortunately, surveys show that 30% of providers are not compliant with either aspect of the rule.
Not only is this a bad image for providers, but it can easily turn into serious financial harm as patients switch services to more transparent providers. Our own surveys reveal that two-in-three consumers would shop for care, and 38% already have.
Price transparency is not going away as a major patient concern, and providers should act accordingly. Provide your charges in a consumer-friendly format and strive to stay compliant with new mandates and regulations. Additionally, be sure to explain these charges and treatments in a way that patients can understand. Outline what is specifically covered by insurance and be sure to thoroughly answer follow-up questions.
Provide flexible payment options
Not every patient will be financially prepared to cover the full cost of their treatments. Preparing for this reality now will help your revenue teams establish practices to assist your patients with financing and payment plans. Part of this preparation is offering flexibility to your patients.
For example, during the pandemic, 43% of providers experienced an increase in requests for payment plans. Three in five families would also like payment and financing plans to be discussed before care is delivered. Providing options such as zero-interest or low-interest monthly payments can all help ease your patient’s financial concerns before treatment is provided.
Insurance Coverage in a Post-Pandemic Landscape
COVID-19’s effect on healthcare and insurance coverage is likely to be significant and long-lasting. Providers experienced declining revenues as surgery rooms and in-patient facilities were shuttered to make room for expanding ICU’s and COVID units. While patients handled extreme disruptions ranging from the loss of their employment and coverage, to extended hospital stays for COVID treatments.
Working towards improving your patient’s health insurance literacy and understanding will help alleviate many of these challenges. When patients are fully informed on their coverage, they are better able to seek out and pay off needed treatments. Empowered and educated patients also benefit providers, as they experience higher repayment rates and lower recourse for medical financing.