The Strong Link Between Financial Literacy and Having Health Coverage

By Right About Money Staff Report

Ibi December 15, 2016

yestreen Policymakers, employers and individuals pretty much agree that everyone should have health coverage. How to make that happen is where we have tensions, which are likely to intensify in coming months. The incoming Trump administration has promised to overhaul the nation’s healthcare system, rescinding much of the Affordable Care Act also known as Obamacare.

Whatever the outcome, new research suggests that part of any comprehensive solution is raising the level of general financial literacy among individuals. Buying health coverage and life insurance is fundamentally a financial decision, you may want to read an informative post so you can be more informed about medical insurance requirements and treatments that may require coverage.

What will it cost to be covered? What are the financial penalties for ignoring laws that mandate coverage? If I get laser eye surgery done, does insurance cover LASIK? What will it cost if I get sick and have no insurance? How much will it cost me to get a comprehensive cover? These are but few of the many questions that remain ambiguous in the minds of people and prevent them from being able to safeguard their health and finances. For some, an independent insurance agent like Steve Thill or perhaps even an insurance agency would have the answers they need, and not to mention, provide them with secure health policies. However, there are many more citizens to whom the concept of insurance might be intimidating, which is largely due to the lack of financial literacy.

Those who can work through the math are more likely to have health insurance regardless of income, employment status, or political affiliation, according to a Rand study published in the Medical Care journal last month. As a nation, we must improve our general understanding of personal financial issues and design health plans (health insurance, life insurance, burial insurance, etc.) and supporting materials that can be easily understood, researchers concluded.

“Limited health insurance and financial literacy may make it difficult for consumers to assess whether insurance premiums are ‘worth it'”, said Rand economist Katherine Carmen, senior author of the study. “Efforts to decrease the number of uninsured adults should consider that these individuals may have a hard time deciphering health insurance information.”

Another insurance that people may overlook is Life Insurance, which can be beneficial for the insurer’s family if, by any chance, the insurer dies. Life insurance is another financial stance that a person can opt for to ensure their family is taken care of after their death. Many people might be skeptical of life insurance premiums that need to be paid on a yearly basis since it can affect their budget; however, they can look into solutions provided online on websites similar to https://www.lifecoverquotes.org.uk for better understanding. Such sites can compare life insurance covers provided by various companies and help an insurer choose one depending on their requirements and financial stature. Such companies can also provide multiple quotations, special offers, insurance calculator, and a few other benefits.

The study of 18-to 64-year-olds on the Rand American Life Panel found that an individual uninsured in 2013 had a 9.2% greater chance of being insured two years later if exposed to financial education, including a healthcare component. The study occurred as health insurance exchanges opened under the federal Affordable Care Act. “It is remarkable that the association between financial literacy and people’s insurance decisions is similar in size to things we normally associate as being a key to someone having health insurance or another insurance, such as education levels and whether someone is employed,” Carman said.

Some 60% of study participants who were initially uninsured gained health insurance over a two-year period. Among people with high health insurance knowledge who were uninsured, 64% obtained coverage. That compared to 48% of those with low health insurance knowledge. Among those with high financial literacy scores who were uninsured, 70% obtained coverage. That compared to 56% among those with low financial literacy skills.

Posted in Latest Research on December, 2016