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Higher levels of health insurance literacy are associated with more efficient use of healthcare services, yet many Americans find health insurance complicated. To better understand consumer aptitude, behavior and confidence regarding health insurance, Corporate Insight’s Health Plan Monitor recently released a Health Insurance Literacy Study. This report uses a survey of over 1,000 respondents and in-depth interviews with the Medicare population and Gen Z to gain exclusive insights into today’s consumers. This post outlines three key findings from the study.
Access a free preview version of the report using the form at the bottom of this post.
Consumers show a baseline understanding of the costs involved in health insurance, but falter when it comes to more complex topics like EOBs
Our study shows that consumers have a moderate understanding of health insurance—many survey respondents correctly defined premiums, copays and deductibles. However, less than half could correctly identify the difference between a claim and Explanation of Benefits (EOB). Concerningly, a considerable portion of respondents believed that EOBs are documents stating the services that their plan covers. Similarly, only about a third of respondents correctly identified 26 as the age at which children can typically no longer be on their parent’s plan. An almost equal amount incorrectly chose 21 years old.
We found that older generations—namely Gen X, Boomers and Silent Generation (with the latter two combined into a Boomers+ group in the graph below)—generally performed equally well on aptitude questions. These generations also performed the best out of all age groups. Gen Zers fared the worst, with their highest percentage of correct answers being 52% when defining premiums.
Consumers display low to moderate confidence in their understanding of health insurance
As part of the survey, we asked respondents to rate their knowledge of health insurance. Only 8% of survey respondents felt that their knowledge of health insurance was “very high,” with many choosing “somewhat high” (36%) or “neither high nor low” (39%). Interviewees similarly exhibited confusion around plans, offerings and coverage, although they felt that their understanding was good enough to select and enroll in a plan during Open Enrollment. Gen Z interviewees overall did not have a strong foundation of key concepts like claims, costs and plan types. On the other hand, Medicare interviewees had a decent foundation of basic insurance knowledge but felt overwhelmed and unprepared for the transition to Medicare.
It’s very difficult to understand what’s covered. Everything about health insurance is so difficult from the beginning to the end. I find myself questioning if an annual checkup is free, even though, of course it is.
-Participant, age 25
Gen Z and Boomers differ when conducting research about insurance and deciding on a plan
Through in-depth interviews, we uncovered several differences between Gen Z and Boomers when it comes to enrolling in a plan. Gen Zers tended to look closely at costs, while consumers new to Medicare considered several factors beyond cost: the network status of their current providers, the distance from their home to in-network facilities, and covered services like dental and vision. To learn about insurance, Gen Z relied on a breadth of resources including employer-provided materials, parents and colleagues, Google, social media, and AI chat tools. On the other hand, newly enrolled Medicare beneficiaries turned to Medicare.gov as their primary online source, and looked to AARP, community resources, brokers, and promotional mailers and brochures.
When AI and machine learning become more reliable, I want to have a chatbot that you can ask questions about health insurance, and I don’t mean the chatbots on my provider’s website that just lead you to links on the webpage itself. Specifically, a tool that recognizes your age. If I ask about a certain benefit that my insurer provides for elderly living, I want it to tell me, ‘You’re not really going to use that because you’re 25 years old and no one on your plan is that old.’
-Participant, age 22
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Download a free preview of the Health Insurance Literacy Study
Stephanie Chan
Stephanie Chan is a Research Manager on CI's healthcare team.