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Many people don't understand their insurance benefits. Hospitals and other providers should proactively explain coverage and out-of-pocket expenses.
Just 28% of consumers say they have a strong understanding of which healthcare services are covered by their health plans, a recent consumer survey shows. During COVID-19, efforts by healthcare revenue cycle teams to help individuals navigate their coverage and their out-of-pocket costs will be key to consumer engagement.
The pandemic packed a level of financial uncertainty that had not been seen in decades. In
spring 2020, 36 million people lost their jobs, the highest level of unemployment since the Great Depression. One analysis projected 26 million people would lose employer health coverage during the pandemic. Most of them (79%) likely qualified for subsidized coverage, whether through Medicaid or the insurance exchanges. Some of these consumers might have been able to switch to their spouse’s insurance coverage.
That’s a significant amount of people who could be navigating new coverage in 2021. Given that 38% of consumers who have insurance only “somewhat” understand which expenses are covered under their health plans — and about one in four understand it “just a little,” according to the survey — it’s important for healthcare revenue cycle leaders to consider: “How are we helping consumers understand their coverage as early as possible in their encounter?”
Here are four approaches that could ease consumers’ concerns and strengthen financial engagement.
Two in three consumers are afraid they won’t be able to afford their medical expenses this year. That’s one reason hospitals should proactively engage consumers that seek price estimates in discussions about out-of-pocket costs of care—the information consumers need most. Without a clear understanding of their financial responsibility for care after insurance, consumers may postpone care based on the estimate alone. That’s a move that could prolong their worries about their health. It could also make existing health issues more serious and more expensive to treat.
Just 28% of consumers surveyed say they have discussed which healthcare expenses their health plan covers with their provider, the consumer survey shows. With hospitals still experiencing decreased volumes in their emergency departments, operating rooms and inpatient units during the pandemic, revenue cycle teams play a critical role in giving consumers the information they need to make informed decisions regarding their care. Make sure consumers understand terms such as deductible, allowed amount and out-of-pocket maximum, and define these terms on billing statements as well. Taking the time to walk patients through their expected benefits not only makes them more confident in pursuing a care plan, but also creates a feeling of goodwill toward the provider.
Two-in-three individuals would shop around for care, and 38% already have, the consumer survey shows. Yet even with a new price transparency rule that took effect in January, 30% of providers aren’t compliant with either aspect of the rule, from posting charges for 300 shoppable services in a consumer-friendly format to sharing their payer-negotiate rates or the cash price offered to self-pay patients. That presents a bad image for cost-conscious consumers. In 2021, it’s important that providers make it easy for consumers to find their charge list. Provide the charges in a consumer-friendly format, and make it clear that charges are different from out-of-pocket costs after insurance. Just as important: Give individuals a point of contact for patient financial discussions. These steps give consumers the basis for making an educated decision as they shop for healthcare services. It also reduces financial anxiety when complex discussions around cost of care are needed.
Some patients may be ill-prepared, financially, to cover the cost of more intensive care. In situations like these, approaching self-pay balances with an emphasis on transparency and payment flexibility eases patients’ financial concerns and enables them to continue to seek necessary care without delay. During the pandemic, for example, 43% of providers are experiencing an increase in requests for payment plans. For certain populations, interest in affordable, flexible options for payment runs high: 41% of consumers surveyed say it’s “very important” that providers offer zero-interest or low-interest payment plans, including 49% of Gen Xers and 45% of millennials. About three in five families want to discuss payment plans or financing before care is delivered.
The pandemic’s long-term effects on insurance coverage require a highly compassionate, highly communicative approach to patient financial engagement. Taking the time to educate consumers on what their insurance covers, how much they can expect to pay out of pocket, and the options available for payment that meet their needs is an excellent place to start.
Mark Spinner is president and CEO of AccessOne.