vol45.3 LR.pdf - International Hospital Federation

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Policy: US health insurance reform Insurance literacy in the United States DIANE HOWARD ASSISTANT PROFESSOR IN THE DEPARTMENT OF HEALTH SYSTEMS MANAGEMENT AT RUSH UNIVERSITY, CHICAGO ABSTRACT: Health insurance reform in the United States can be traced back to former President Theodore Roosevelt in 1912 who called for universal health coverage. Since that time, various US Presidents attempted to intervene to cover all Americans with some form of compulsory insurance. The election of President Barack Obama in 2008 was believed to be a beginning of a new dialog to transform health care in the United States by redesigning the insurance system in the country. The issue of insurance literacy and the need to educate citizens on insurance terminology are the focus of this article. Anational health debate is underway in the United States on how best to transform the healthcare system. For the most part, the debate should be devoted to issues of access, quality, and costs. However, the focus has been on the sustainability of the existing system due to cost escalation. Onesixth of the US economy is health care related 1 so protecting the business interests of the system is paramount in major circles of the debate. Health-care reform is a key domestic issue of the new Barack Obama Administration. The current debate is much more narrow and limited to health insurance reform. The broad framework that the Administration has given to Congress in its committee deliberations to revamp the health insurance system include the following provisions 2 : ✚ No discrimination for pre-existing conditions. ✚ No exorbitant out-of-pocket expenses, deductibles or copays. ✚ No cost-sharing for preventive care. ✚ No dropping of coverage if you become seriously ill. ✚ No gender discrimination. ✚ No annual or lifetime caps on coverage. ✚ Extended coverage for young adults. ✚ Guaranteed insurance renewal so long as premiums are paid. While the aforementioned goals are noble, the question is if the general public understands the personal implications of preexisting conditions, deductibles, co-pays, cost-sharing, gender discrimination, and lifetime insurance caps. In 2008, total national health expenditures were expected to rise 6.9%. 3 Total spending was $2.4 trillion in 2007, or $7900 per person. 4 The health share of gross domestic product (GDP) was expected to increase to 16.3% in 2007 and then rise, reaching 19.5% of GDP by 2017. 5 Health insurance literacy is a component of health literacy, a broader term that defines the degree to which individuals have the capacity to obtain, process, and understand basic health information and services needed to make appropriate health decisions. 6 Similarly, health insurance literacy is the ability to understand basic insurance concepts to make health-care decisions related to one’s insurance coverage. 7 Greater insurance coverage is associated with improved utilization of preventive services and medical treatments that can reduce disease and contribute to improved health status. 8 So, if the health-care system is reorganized and the provisions of insurance as listed above become a reality, do consumers understand the realities of the existing health-care system and the nature of the insurance plans in which they participate. Health insurance literacy The National Adult Literacy Survey reported in 1993 that more than 40 million Americans were functionally illiterate, meaning that they could not perform the basic reading tasks necessary to function fully in society. 9 This survey did not include health-related items which are more difficult to understand than general information. In 2003 the results of the 2003 National Assessment of Adult Literacy reported that 77 million adults have basic or below health literacy skills. 10 Baker et al 11 conducted a study at two public hospitals where they found that one third of the Englishspeaking patients were classified as having inadequate functional health literacy, indicating that they were unable to read and comprehend the most basic health-related materials. The Parker et al 12 research developed the Test of Functional Health Literacy in Adults (TOFHLA) and then used the instrument to assess the prevalence of patient illiteracy at two urban public hospitals in Atlanta and Los Angeles. 13 They examined health literacy to determine how literacy impacts access to care and compliance with prescribed medical regimens. Health literacy was divided into three criterion levels: inadequate, marginal, and 04 World <strong>Hospital</strong>s and Health Services Vol. 45 No. 3
Policy: US health insurance reform adequate. “Inadequate” literacy resulted in misreading instructions, appointments, and procedures; “marginal’” literacy resulted in trouble understanding and misreading; “adequate” resulted in comprehension difficulties with financial eligibility. 14 The Parker et al framework tested functional literacy in adults related to medical instructions. The TOFHLA consists of two parts, a numeracy comprehension test of ten short hospital texts involving quantitative information as well as words (TOFHLA: Numeracy) and a reading comprehension test of three hospital passages (TOFHLA: Reading Comprehension). 15 The TOFHLA is administered individually and takes 10 to 20 minutes for completion. The author of this article developed an insurance literacy survey administered to her health administration graduate students. The 67 participating graduate students were between the ages of 24 and 55 years in which their knowledge of health insurance was evaluated. 16 An insurance scenario was developed using Parker, Baker, Williams, and Nurss’ 17 framework to assess the participant’s insurance literacy. Comparable to the TOFHLA, the insurance survey tested their familiarity with insurance terms including plan type, in-network services, deductible and coinsurance, excluded services, high-risk categories, Consolidated Omnibus Budget Reconciliation Act (COBRA), appeals and grievances, and healthy eating compliance. The questions that were answered incorrectly related to plan type, innetwork use, and consumer appeals and grievances. While the participating sample size was limited, it provides implications for the larger population who may not be familiar with the health-care sector comparable to graduate students, most of who have worked in the health-care industry. What should the consumer know about the Obama administration’s health policy provisions? The Obama Administration’s health insurance provisions are described. 1) Pre-existing conditions are health conditions or illnesses that an insurance subscriber had before the first day of coverage on a new plan. Insurance companies prefer not to insure enrollees with pre-existing conditions because of the medical costs they will incur. If this provision is excluded in the new health policy, prospective enrollees will find it easier to gain insurance. The unintended consequence may include rigid monitoring of their condition and mandatory participation in case management programmes to keep their conditions from limiting the insurance company’s exposure to health claims. 2) Out-of-pocket expenses, deductibles or co-pays vary by insurance company and plan type in which a person enrolls. Out-of-pocket expenses are health-care costs not covered by an insurance plan. Deductibles and co-payments are part of the out-of-pocket umbrella term. A deductible is a dollar threshold that must be hit before an insurance company will start to pay for a health benefit. Once the threshold is hit, the insurance company will pay the rest. A co-payment is a dollar amount that is paid each time a service is accessed. For example, a co-payment would be required for a primary care exam, laboratory tests, or diagnostic radiology visit. In some cases, out-of-pocket expenses have become excessive and so patients delay receiving services which can put their health in jeopardy. If out-of-pocket expenses are reduced, this may encourage the over-utilization of these services and so a mechanism to control their growth may be warranted. The unintended consequence is that a bureaucracy to monitor and control their growth will add to administrative overhead. 3) No cost sharing for preventive care relates to the previous point on out-of-pocket expenses. It reaffirms the Administration’s perspective that access to preventive care is encouraged and will drive support for lower costs alternatives to specialty care. There are horror stories of insurance holders who have consistently paid their claims on time and then lost their insurance coverage when they most needed it. 4) The “no dropping of coverage if individuals become seriously ill” provision is a way to prevent this. This provision will provide the advocacy that insurance subscribers require and it notifies the insurance company that the federal government will prohibit such an occurrence. 5) The prohibition on gender discrimination relates to the differential that women of childbearing age face because their premiums are often higher than men of a comparable age. Women are systematically discriminated against because they may become pregnant. 6) The annual or lifetime caps on coverage relates to those with catastrophic illness or conditions that may require extensive medical supports. Once the insurance company expenditures reach a threshold of a given dollar amount, the insurance company may terminate covering the subscriber for additional services. This may be the case for a solid organ transplant patient who requires ongoing drug care after months of treatment. 7) Extended coverage for young adults is a provision that relates to those who may be out of high school and have yet to find employment or finish college. They are referred to as the “young invincibles” because they may participate in activities that add to their risk of injury. While they may be recognized as adults at age 18, if they are unemployed or not carried on a parent’s insurance plan, they may be uninsured. This population will require extensive education on the value of insurance. 8) Guaranteed insurance renewal so long as premiums are paid is an important provision in a new plan because it mandates that an insurance company renew a subscriber’s coverage if the subscriber has paid their premiums on a consistent basis. The capricious nature in which insurance companies have terminated contracts with their subscribers will no longer acceptable. Where insurance reform stands? While the Obama Administration entered office in January 2009 with health care as its top domestic agenda, the discussion in Congress has been adversarial along political party lines. The United States Congress is the bicameral legislature of the federal government consisting of two houses, the Senate and the House of Representatives. The primary committees responsible for the health-care legislation include the House’s Energy and Commerce Committee and Senate’s Finance Committee. The House Energy and Commerce Committee is composed of 59 members, 36 Democrats and 23 Republicans. 18 The Senate Finance Committee is composed on 23 members, 13 Democrats and 10 Republicans. 19 The party in the majority seats the larger number of World <strong>Hospital</strong>s and Health Services Vol. 45 No. 3 05
Page 1: 2009 Volume 45 Number 3 www.ihf-fih
Page 4 and 5: Editorial Editorial DR JOSE CARLOS
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Page 10 and 11: Policy: migrant-friendly hospitals
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vol45.3 LR.pdf - International Hospital Federation

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