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Introduction

Implementation of the Affordable Care Act (ACA) of 20101 will result in significant changes to the U.S. health care system. Among its many provisions, the ACA will extend access to health care coverage to millions of Americans who have been previously uninsured. Coverage will be achieved through a variety of mechanisms, including, for example, expansion of Medicaid eligibility and the establishment of state health insurance exchanges (IOM, 2011). The ACA calls for each state to set up an “exchange,” or marketplace, where small businesses (those with 100 or fewer employees) and people not covered through their employers could shop for health insurance at competitive rates. Some of those insured through the exchanges would pay for the insurance coverage themselves, while others with relatively low incomes would receive subsidies to help defray the cost of the premiums. As envisioned, the exchanges, which are to be operational by 2014, will offer four levels of plans—platinum, gold, silver, and bronze—that would vary in price. States have flexibility in how the insurance exchanges would operate, and in fact, states can opt out of setting up an exchange. A federally operated exchange would operate in those states that do not set up one themselves.

Health insurance products are complex, making comparison shopping and educated decisions difficult. Plans available through the exchanges

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1 The Patient Protection and Affordable Care Act (PPACA, Public Law 111-148) was signed into law on March 23, 2010. The PPACA was later amended by the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and the final version is referred to as the Affordable Care Act (ACA).



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1 Introduction Implementation of the Affordable Care Act (ACA) of 20101 will result in significant changes to the U.S. health care system. Among its many provisions, the ACA will extend access to health care coverage to mil - lions of Americans who have been previously uninsured. Coverage will be achieved through a variety of mechanisms, including, for example, expansion of Medicaid eligibility and the establishment of state health insurance exchanges (IOM, 2011). The ACA calls for each state to set up an ”exchange,” or marketplace, where small businesses (those with 100 or fewer employees) and people not covered through their employers could shop for health insurance at competitive rates. Some of those insured through the exchanges would pay for the insurance coverage themselves, while others with relatively low incomes would receive subsidies to help defray the cost of the premiums. As envisioned, the exchanges, which are to be operational by 2014, will offer four levels of plans—platinum, gold, silver, and bronze—that would vary in price. States have flexibility in how the insurance exchanges would operate, and in fact, states can opt out of setting up an exchange. A federally operated exchange would operate in those states that do not set up one themselves. Health insurance products are complex, making comparison shopping and educated decisions difficult. Plans available through the exchanges 1 The Patient Protection and Affordable Care Act (PPACA, Public Law 111-148) was signed into law on March 23, 2010. The PPACA was later amended by the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and the final version is referred to as the Affordable Care Act (ACA). 1

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2 FACILITATING STATE HEALTH EXCHANGE COMMUNICATION will differ by their associated premium cost, benefit coverage, and out-of- pocket expenses (e.g., deductibles, co-payments). It may be particularly difficult for individuals with poor literacy and numeracy skills to find an insurance plan that meets their needs when faced with many insurance options. Nearly half of all American adults—90 million people—have inadequate health literacy to navigate the health care system (IOM, 2004). Health literacy is “the degree to which individuals have the capacity to obtain, process, and understand basic health information and services needed to make appropriate health decisions” (Ratzan and Parker, 2000). Many of the newly eligible health insurance consumers will be indi - viduals of low health literacy, some speakers of English and others more comfortable using languages other than English. Health insurance terms such as “deductible,” “co-insurance,” and “out-of-pocket limits” are diffi- cult to communicate even to those with moderate-to-high levels of health literacy and so health exchanges will face challenges as they attempt to communicate to the broader community. In addition to having to con - vey some of these basic, and yet complex, principles of insurance, state exchanges will be attempting to adapt to the many changes to enrollment and eligibility brought about by ACA. While these challenges may seem daunting, there are important lessons to be learned from a number of existing programs and research endeavors. The Institute of Medicine (IOM) convened the Roundtable on Health Literacy to address issues raised in its report Health Literacy: A Prescrip- tion to End Confusion (IOM, 2004). The roundtable brings together leaders from the federal government, foundations, health plans, associations, and private companies to discuss challenges facing health literacy practice and research and to identify approaches to promote health literacy in both the public and private sectors. The roundtable’s focus is on building partner- ships to move the field of health literacy forward by translating research findings into practical strategies for implementation. The roundtable also serves to educate the public, press, and policy makers regarding issues related to health literacy. The roundtable sponsors workshops for members and the public to discuss approaches to resolve key challenges. Reports from workshops held by the roundtable include the following: • Standardizing Medication Labels: Confusing Patients Less: Workshop Summary (2008) • Health Literacy, eHealth, and Communication: Putting the Consumer First: Workshop Summary (2009) • Toward Health Equity and Patient-Centeredness: Integrating Health Literacy, Disparities Reduction, and Quality Improvement: Workshop Summary (2009)

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3 INTRODUCTION • Measures of Health Literacy: Workshop Summary (2009) • The Safe Use Initiative and Health Literacy: Workshop Summary (2010) • Innovations in Health Literacy Research: Workshop Summary (2011) • Health Literacy Implications for Health Care Reform: Workshop Sum - mary (2011) • Promoting Health Literacy for Prevention and Wellness: Workshop Sum- mary (2011) • Improving Health Literacy Within a State: Workshop Summary (2011) The roundtable sponsored a workshop in Washington, DC, on July 19, 2011, that focused on ways in which health literacy can facilitate state health insurance exchange communication with potential enrollees. The roundtable’s workshop focused on four topics: (1) lessons learned from existing state insurance exchanges; (2) the impact of state insurance exchanges on consumers; (3) the relevance of health literacy to health insurance exchanges; and (4) current best practices in developing materi - als and communicating with consumers. The report that follows summarizes the presentations and discussion that occurred during the workshop. Chapter 2 provides an overview of health insurance exchanges with views on their creation and optimal operation. Chapter 3 presents evidence on the extent to which consumers understand underlying health insurance concepts and some of the unique challenges faced by consumers who speak languages other than English. Chapter 4 describes the relevancy of health literacy to health insurance reform and how health literacy interventions can facilitate the implemen- tation of health insurance reforms. Chapter 5 follows with a review of best practices in developing materials and communicating with consumers. Chapter 6 concludes with reflections on the workshop presentations and discussions by members of the roundtable and its chair. Further informa - tion is provided in the appendixes, the workshop agenda (Appendix A), workshop speaker biosketches (Appendix B), and testimony provided by the organization America’s Health Insurance Plans (AHIP) (Appendix C). The workshop was organized by an independent planning committee in accordance with the procedures of the National Academies of Science. The role of the workshop planning committee was limited to planning the workshop. Unlike a consensus committee report, a workshop summary may not contain conclusions and recommendations. Therefore, this sum - mary has been prepared by the workshop rapporteur as a factual sum - mary of what occurred at the workshop. All views presented in the report are those of workshop participants. The report does not contain any find- ings or recommendations by the planning committee or the roundtable.

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4 FACILITATING STATE HEALTH EXCHANGE COMMUNICATION REFERENCES IOM (Institute of Medicine). 2004. Health literacy: A prescription to end confusion. Washington, DC: The National Academies Press. IOM. 2011. Health literacy implications for health care reform: Workshop summary. Washington, DC: The National Academies Press. Ratzan, S. C., and R. M. Parker. 2000. Introduction. In National Library of Medicine current bibliographies in medicine: Health literacy, edited by C. R. Selden, M. Zorn, et al. NLM Pub. No. CBM 2000-1. Bethesda, MD: National Institutes of Health.