The health care status quo is against ‘one-size-fits-all’ health care. Aside from the fact that people have little to no input into the design of the health plans, ‘choice’ has given us an overpriced and overly complex health care system. Could it be that the reason American health literacy is so low is that there are too many types of health plans? Offering one health plan to everyone would not only improve health literacy (or end the need for it), it would save money.

We’re Health Care Stupid…

Despite the efforts of employee benefits managers, consultants, brokers, communications and health care policy experts, Americans have limited health literacy—“the ability to obtain, process, and understand basic health information and services to make appropriate health decisions.” Surveys show that Americans know a lot less about health insurance than they think they do. A 2016 survey conducted by Policygenius, revealed that 96% of Americans don't understand the terms deductible, coinsurance, copay, and out-of-pocket maximum. A 2019 United Healthcare study, as reported by Motley Fool, showed that 90% did not know the insurance terms: premium, deductible, coinsurance, and out-of-pocket maximum.

It’s hard to make wise health care decisions if you don’t understand basic, cost-related health insurance terms that are part of most private health plans. We could eliminate premiums, deductibles, coinsurance, and copays under our current for-profit health care system. No one has to learn these terms. But instead of removing these terms from their health plans, employers and insurers have added more complexity. So-called health plan design innovations are the latest buzz in employer-sponsored health plans. Centers of excellence, reference-based pricing, high-performance networks, etc.: these cost-containment strategies replaced by one simple reform—one health care plan for everyone.

One Health Plan Is All We Need

Employers have it all wrong when it comes to health plan design. We don’t need a thousand different types of health plans, or health plan design innovations. A thousand different health plans require a thousand different documents that insurers must store in their systems. That equals more time spent doing system administration, and less time evaluating health care quality. If we had just one health plan:

• We could simplify health plan administration.
• We could simplify health care billing (by having one claim form and one billing form) and reduce billing errors (fewer billing codes).
• We could reduce doctor burnout caused by excessive plan administration tasks.
• We could force hospital administrators to focus on health care quality, not contract negotiations.
• We could spend less time learning health plan terms.
• We could eliminate bad health plan choices and eliminate the need for decision support tools.
• We could eliminate the time and expense of annual insurance renewals (and shopping for insurance altogether).
• We could eliminate the stress of searching for the ‘best’ health plan.
• We could prevent more knowledgeable insurance sales representatives from taking advantage of less knowledgeable employer representatives and people (not saying all or most sales reps take advantage of their clients, but the incentives exist for those so inclined).

Tags: health care , health insurance , health care literacy