What is Health Insurance Literacy?
Health insurance is among the most complicated and costly products that consumers buy. Lacking health insurance-related knowledge and skills—or health insurance literacy—puts people at risk of choosing an insurance product that could fail to provide needed benefits or protect them financially. With greater access to health coverage through the federal Affordable Care Act, millions of Americans—many for the first time—are facing challenges in choosing and using health insurance.
The American Institutes for Research (AIR) worked with experts across the nation to create and validate a Health Insurance Literacy Measure© (HILM) to gauge people’s ability to find and evaluate information about health plans, select the best plan given individual financial and health circumstances, and use the plan once enrolled.
Measuring Health Insurance Literacy
The HILM consists of 21 self-report questions assessing self-confidence and behaviors associated with choosing and using health insurance. The HILM was validated with 18 objective, multiple-choice questions assessing understanding of health insurance terms and concepts, ability to correctly interpret summary-of-benefit and coverage tables and explanation-of-benefits statements and calculate out-of-pocket cost from coverage scenarios. For a full description of the measure, see Paez, Kathryn A., et al., “Development of the Health Insurance Literacy Measure (HILM): Conceptualizing and Measuring Consumer Ability to Choose and Use Private Health Insurance,” Journal of Health Communication, Vol. 19, Supplement 2 (October 2014).