Low health literacy in the United States contributes to as much as $238 billion in annual health care costs driven by confusion over insurance and medical terms

South Florida – Across the United States, health care continues to grow more complex, more expensive, and, for many people, harder to understand. A new focus on health literacy is drawing attention to a problem that experts say is quietly driving billions of dollars in unnecessary costs each year while also affecting how people make decisions about their care.

In South Florida, health officials and insurance leaders are pointing to a striking statistic: nearly 9 out of 10 adults struggle to understand basic health care and insurance terms, according to the U.S. Centers for Disease Control and Prevention (CDC). That gap in understanding is often described as a “language barrier” within the health system, and its impact goes far beyond confusion at the doctor’s office.

The World Health Organization estimates that this lack of understanding can cost American adults anywhere from $143 to $7,798 more per year in medical expenses. When scaled across the population, those individual losses add up quickly, reaching as much as $238 billion in unnecessary health care costs annually. Experts also warn that the consequences are not only financial. Poor health literacy is linked to skipped preventive care, delayed treatment, and even avoidable hospital stays.

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Health care itself is already a stressful subject for many families, especially when unexpected bills arrive or coverage rules are unclear. Simple questions like what a copay means or what it really means to be in-network can shape major financial decisions. Yet many patients still find themselves navigating a system filled with unfamiliar terms and confusing rules.

A recent 2025 article in the journal “Atencion Primaria” supports this concern, noting that individuals who understand health insurance terminology are better equipped to make informed decisions about their care and spending. Without that knowledge, patients are more likely to misunderstand coverage details, leading to financial strain or gaps in treatment.

“Health education is an important part of health coverage,” said David Wagner, market president, Florida Blue. “When people understand key health insurance terms and concepts, they are better prepared to make informed choices for their health and their budgets.”

Wagner’s comments reflect a growing push within the insurance industry to simplify communication and help consumers better understand how their plans work. Florida Blue and other insurers have increasingly focused on education efforts, hoping to reduce confusion that often leads to costly mistakes or delayed care.

One of the most important concepts for consumers to understand is the premium. A premium is the amount paid regularly, usually every month, to maintain health insurance coverage. It works much like a membership fee, meaning it must be paid regardless of whether medical services are used. For many people, this cost is automatically deducted from paychecks or Social Security benefits, depending on how they receive coverage.

In addition to premiums, another key concept is the network. Each insurance plan includes a group of doctors, hospitals, and pharmacies that agree to provide services at discounted rates. These are known as in-network providers, and using them usually results in lower costs for patients. The discounted price itself is called the allowed amount, which determines how much a patient pays when receiving care within the network.

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Deductibles also play a major role in how much people spend. A deductible is the amount a person must pay each year before their insurance begins covering most services. Every eligible medical expense contributes toward reaching that threshold. Once the deductible is met, insurance coverage typically becomes more active in sharing costs.

Even after the deductible is met, patients may still face out-of-pocket costs. However, most insurance plans include an out-of-pocket maximum, which sets a yearly limit on how much an individual must pay for covered services. After reaching that limit, the insurance plan covers 100 percent of approved medical expenses for the rest of the year. This cap is designed to protect patients from overwhelming medical debt in cases of serious illness or injury.

Together, these terms form the foundation of how health insurance works in the United States. Yet for millions of people, they remain confusing or misunderstood. That confusion, experts say, is one of the hidden drivers behind rising health care spending and unequal access to care.

“Florida Blue’s mission is to help communities and people achieve better health,” said Wagner. “We believe that starts with understanding how health insurance works. That’s why we’re committed to explaining these concepts.”

Health advocates argue that improving health literacy is not just about saving money, but also about improving outcomes. When patients understand their coverage, they are more likely to seek preventive care, follow treatment plans, and avoid unnecessary emergency visits.

As health care costs continue to rise, the push for clearer communication is gaining urgency. Experts say that even small improvements in public understanding could reduce confusion, lower costs, and help millions of families make better decisions about their health.

For now, the message from health leaders is consistent: understanding the system is no longer optional, but essential.