Health Insurance Literacy Alone Is Not Enough: The Added Explanatory Value of System Perceptions for Insurance-Related Outcomes in Israel, A Cross-Sectional Survey Study

In the modern world, navigating health insurance is often less about getting sick and more about getting lost in a maze of paperwork. For many people, the system feels like a foreign language filled with confusing terms, hidden rules, and layers of coverage that overlap in ways that are hard to untangle. Researchers have long tried to measure how well people can handle this complexity, coining a term called "health insurance literacy." This concept describes a person's ability to find, understand, and use information about their insurance to make good decisions. Traditionally, scientists have measured this by asking people how confident they feel when choosing a plan or using their coverage. The assumption has been that if someone feels confident, they likely understand the system well enough to get the care they need. However, as health systems grow more complicated, with public coverage mixed alongside private add-ons, this simple measure of confidence might not tell the whole story. It is possible for someone to feel sure of themselves while still missing crucial details, or for the system itself to be so tangled that even a knowledgeable person struggles to find their way.

A recent study conducted in Israel set out to test whether this standard measure of confidence was enough to explain how people actually interact with their insurance. The researchers, led by Reut Ron at Ben-Gurion University of the Negev, gathered data from 511 adults across the country. They asked these participants to fill out a detailed survey that included the standard questions about their confidence and habits regarding health insurance. But the researchers did not stop there. They also asked two specific questions about how the participants saw the insurance system itself: how clear did they find the rules and information, and how complex did they feel the system was? By comparing the answers to these questions with the participants' self-reported knowledge of their own coverage and their actual use of private insurance, the team hoped to see if looking at the system's clarity added any new understanding to the picture.

The results revealed a distinct split in how these different factors played out. The standard measure of health insurance literacy was very good at predicting how much people felt they understood the system. If a person scored high on the confidence and behavior questions, they were very likely to say they understood their insurance well. In fact, this measure explained about one-third of the differences in how people rated their own understanding. However, when the researchers looked at whether people actually knew the specific details of their coverage or whether they used private insurance, the standard measure became much less useful. It could not fully explain why some people knew their coverage details while others did not, nor why some used private insurance and others did not.

This is where the new questions about the system itself made a difference. When the researchers added the participants' views on system clarity and complexity to the analysis, the picture became slightly clearer for those specific outcomes. The study found that people who perceived the system as more complex were actually more likely to report that they knew their coverage details and had used private insurance. Conversely, those who felt the system was very clear were less likely to report these things. This might seem counterintuitive, but the researchers suggest it is not because complexity helps people learn. Instead, it is likely that people who have had to deal with their insurance more often—perhaps because they have used private benefits or tried to understand their rights—have encountered more layers of the system. These repeated interactions make the system feel more complex to them, but they also leave them with more actual knowledge and experience. It is similar to how a person who has traveled frequently might complain that travel is complicated, while a person who has never left their hometown might think it is simple, simply because the traveler has seen more of the machinery at work.

The study also looked at how hard people found it to make insurance decisions or understand their rights. Here, neither the standard confidence measure nor the views on system complexity made a strong difference. This suggests that the feeling of difficulty is driven by other factors, perhaps the sheer administrative burden or the cost of care, which are not captured by simply asking about confidence or system clarity. The researchers were careful to note that their study was a snapshot in time, meaning they could not prove that seeing the system as complex caused people to know more about it. It is just as likely that knowing more about the system led people to see it as complex.

Ultimately, the findings suggest that relying solely on how confident people feel about their insurance literacy is an incomplete way to understand how they navigate the system. While confidence is a useful indicator of how people feel about their abilities, it does not fully capture their actual knowledge or their use of insurance services. To get a true picture, policymakers and researchers need to also consider how people perceive the system around them. If the goal is to help people make better choices and access the care they need, simply teaching individuals to be more confident is not enough. The system itself must be examined, because the way people experience its clarity or complexity plays a real role in how they engage with their health coverage.