If you have ever struggled to understand your EOB — the explanation of benefits from your health or dental insurance plan — you are not alone.
You need to use many health literacy skills to achieve understanding of this document. In addition to understanding complex insurance terms, such as “copay,” “deductible,” and “coinsurance,” you have to use numeracy skills to decipher seemingly clear tables. Yet, the 2005 National Assessment of Adult Literacy found that only 12 percent of Americans were proficient enough to calculate an employee’s share of health insurance costs per year, using a table that showed how employee cost varied by income and family size.
When consumers lack these skills, an EOB is virtually useless because calculating out-of-pocket costs is more complicated than calculating the employee share of the premium. In fact, a 2013 study found that while nearly 3 out of every 4 Americans between ages 22-64 believed they could use their health insurance, only around 1 out of every 5 could accurately calculate how much they owed for a doctors visit.
A major hurdle is the lack of standardization which results in insurance companies using different formats, layouts, abbreviations, and codes. Employing a set of standards across both public and private plans would help. The ACA required health plans to provide the summary of benefits in easy-to-understand formats. This should be extended to EOBs. And there are some promising formats out there. United HealthCare has created an easy-to-read summary and provides definitions on the page for insurance jargon. Cigna worked with the Center for Plain Language to do something similar, providing a summary page and glossary of terms. Making all EOBs look the same would go a long way toward avoiding confusion from having to relearn new formats and systems every time someone changes carriers.
The last major challenge is deciphering medical billing codes to ensure that your health care provider got them right. Often denials occur because of simple errors in the billing codes. This has happened to me twice in the last 16 months. Health care providers use three different medical classification systems with thousands of codes, so it is easy to see how mistakes can and do happen.
Also, discrepancies can arise between the coding practices of the hospital/provider and what codes are paid by your insurance. These can be resolved, but only after numerous calls to both the provider and insurer, which takes a lot of time, energy, and effort by the consumer. Providers rely on the consumer to resolve these disputes; they just want someone to pay the bill. However, if hospitals and providers were truly consumer-oriented, they would assist patients in resolving these disputes instead of relying on the patient to negotiate a resolution.
When it all comes down to it, the most important number on the EOB for me is the customer support phone number, because I usually have to call and have them walk me through what was covered, what they will pay, what wasn’t covered, and why it wasn’t covered.
For now it is up to us to do the dirty work.