A premise of engaging consumers in their health care through more cost-sharing is that they will access and be able to use price and quality data effectively and will understand how their benefits work. A survey from the Kaiser Family Foundation suggests that, for now at least, many Americans struggle to be health literate. (Kaiser Survey) The survey asked about 1300 American adults to identify or define common health insurance terms. Overall, 52% of respondents answered 7 of the 10 questions correctly, but 8% got none right. 76% knew what a premium was and 79% knew you paid it every month even if you didn’t use services. 76% also understand the concept of a provider network and 72% understood a deductible. But only 16% could calculate their out-of-pocket costs for an out-of-network lab test paid for on a percent of allowed charges and only 33% knew what a formulary was. About half could calculate their cost for a hospital stay with a per day copay and a deductible.
Persons with insurance obviously answered more items correctly than those without. Older people also had higher scores than did younger ones, probably because older adults are more likely to have insurance and to have used it more frequently. Men and women did roughly equally well. Those with a college education had substantially higher knowledge than high school graduates. Since poorer and less educated adults are often in worse health and have higher health spending and health care needs than the general population, their lower health literacy is clearly a problem that needs to be addressed and exposes a significant flaw in the notion that consumers can be easily engaged in understanding their health, health care and health insurance.