Health Insurance Literacy and Medical Debt in Middle-Age Americans

Abstract

Background: Health insurance literacy (HIL) may influence medical financial burden among people who are sick and the most vulnerable. Objective: This study examined the relationships between HIL, health insurance factors, and medical debt among middle-age Americans, a population with an increasing prevalence of illnesses. Methods: Linear and generalized linear regression analyses were conducted on data drawn from the 2015–2016 waves of the Health Reform Monitoring Survey, a national, internet-based sample of Americans age 18 to 64 years. The analytical sample included 8,042 people age 50 to 64 years. Key Results: Adjusted mean HIL scores did not differ by private versus public insurance or by out-of-pocket costs. Mean HIL scores were lower with higher deductibles; however, differences in mean scores were small. Higher HIL was associated with lower medical debt (odds ratio = 0.97; 95% confidence interval [0.96, 0.98]), but at the highest HIL score, the risk of having medical debt was still 13.8%. Public coverage, higher annual deductibles, and out-of-pocket costs were associated with higher risks of having medical debt. Conclusions: The findings suggest that HIL plays an important role in medical debt burden. However, with the shift toward high cost-sharing insurance plans, addressing health care affordability issues along with HIL are critical to eliminate medical debt problems. [ HLRP: Health Literacy Research and Practice . 2021;5(4):e319–e332.] Plain Language Summary: Understanding and using health insurance (also defined as health insurance literacy) may influence the ability to pay medical bills among people who are sick and vulnerable. This study examined the relationships among health insurance literacy, health insurance factors, and difficulty paying medical bills (i.e., medical debt) in Americans age 50 to 64 years using data from the Health Reform Monitoring Survey. People with higher health insurance literacy reported lower medical debt. Type of insurance coverage did not influence medical debt. Those with annual deductibles and out-of-pocket health care costs were more likely to report having medical debt.

Health insurance literacy among head and neck cancer patients and their caregivers: A cross‐sectional pilot study

“…14 To date, there is only one validated measure of health insurance literacy, the Health Insurance Literacy Measure (HILM). 8,15 Researchers have documented negative outcomes associated with poor health insurance literacy, such as delaying or avoiding care, 15,16 difficulty paying medical bills 17,18 and reporting difficulty in paying for non-medical needs (e.g., rent, food). 19 National data suggest that 53.8% of US adults have low health insurance literacy based on the HILM (defined as having a score of ≤60 out of 84), 20 suggesting opportunities for improvement.…”

“…Health insurance literacy is defined as “the degree to which individuals have the knowledge, ability, and confidence to find and evaluate information about health plans, select the best plan for their own (or their family's) financial and health circumstances, and use the plan once enrolled.” 14 To date, there is only one validated measure of health insurance literacy, the Health Insurance Literacy Measure (HILM). 8 , 15 Researchers have documented negative outcomes associated with poor health insurance literacy, such as delaying or avoiding care, 15 , 16 difficulty paying medical bills 17 , 18 and reporting difficulty in paying for non‐medical needs (e.g., rent, food). 19 National data suggest that 53.8% of US adults have low health insurance literacy based on the HILM (defined as having a score of ≤60 out of 84), 20 suggesting opportunities for improvement.…”

Understanding the role of financial health literacy in midlife and old age: A scoping review

“…Medicare, a US‐based health insurance program for individuals aged ≥65 years and people with disabilities; Sivakumar et al, 2016 ) and having long‐term care insurance coverage in older adults (Gillen et al, 2020 ). Moreover, adequate health insurance literacy was suggested to minimise healthcare debts in people aged ≥50 years (Wiltshire, Liu, et al, 2021 ) and alleviate problems or worry in paying medical bills (i.e. medical financial hardship) among patients diagnosed with cancer (Zhao et al, 2019 ).…”

“…Other studies had specific assessment tools for health insurance literacy, which involved confidence in understanding the Medicare program (Sivakumar et al, 2016 ; Zhao et al, 2019 ); perceived (subjective) and actual (objective) knowledge of Medicare benefits/coverage (Sivakumar et al, 2016 ); and familiarity with insurance terms (e.g. premium, co‐payments, deductible and out‐of‐pocket spending; Wiltshire, Liu, et al, 2021 ).…”

“…Financial literacy was related to increased retirement planning behaviours (Chambers et al, 2021;Palací et al, 2018;Topa et al, 2018); availing private long-term care insurance (Gousia, 2016) (Gillen et al, 2020). Moreover, adequate health insurance literacy was suggested to minimise healthcare debts in people aged ≥50 years (Wiltshire, Liu, et al, 2021) and alleviate problems or worry in paying medical bills (i.e. medical financial hardship) among patients diagnosed with cancer (Zhao et al, 2019).…”