Navigating health insurance choices


Choosing a health insurance plan requires strong health literacy and a good understanding of risk and probabilities.

Without those tools, many consumers eligible to buy insurance through healthcare exchanges in 2014 are likely to pick the wrong plan for their needs, says Andrew J. Barnes, Ph.D.

Barnes, an assistant professor in Virginia Commonwealth University’s Department of Health Behavior and Policy, launched a study in September 2012 to assess the ability of uninsured Virginians to understand their options and pick appropriate coverage.

The study, “Health Insurance Choice Project: Working to understand and improve consumer decisions,” used surveys, health literacy tests and risk assessment exercises to gather data from 521 participants across three groups of uninsured individuals: rural Virginians, inner-city Richmond, Va., residents and an online sample.

It also assessed the general characteristics of uninsured individuals such as their health-use history, health status and demographics.

“When buying health insurance, you’re essentially moving money from a healthy state to an uncertain future sick state,” Barnes says. “It encompasses things such as how you value the future and how well you perceive your own risks.”

Individuals who shop for insurance through health exchanges are likely among the highest-risk consumers because they typically have lower education and no familiarity with choosing insurance combined with pent-up health needs, Barnes says.

That makes it even more important for consumers to choose the best health plan for them, he says, adding that each state will offer dozens of choices but it’s unclear how the exchanges will be designed or how much assistance consumers will receive when navigating their choices.

“We expect many people aren’t going to buy enough coverage for their expected healthcare needs,” Barnes says. “And once they make a decision, even if it’s a bad one, they will probably stick to it. That will have implications in their ability to access timely and appropriate primary care and lead to worse health outcomes.”

His research data leads to three policy outcomes that could improve consumer choices.

These include an educational campaign to increase health insurance literacy, bolstering the supply of “navigators” or government-provided agents who can walk consumers through their options or designing tools used to compare insurance plans in a way that decreases dependency on health literacy and numeracy.

“Someone has to help these consumers have a fighting chance to make good decisions in the exchanges,” Barnes says. “If you make individuals buy health insurance and they choose inadequate coverage, what’s the point?”

The $180,000 research study is funded by the VCU Health Policy Collaborative and the Virginia Tobacco Indemnification and Community Revitalization Commission.