A doctor supporting patient health insurance financial literacy.
  • Patient education on insurance costs is a key RCM improvement strategy.
  • Help patients navigate ACA changes to protect your practice’s revenue.
  • Transparent cost estimates and staff training build trust and improve collections.

Looking for a way to boost your revenue cycle management performance? While automation and artificial intelligence are powerful tools, the American Medical Association highlights an equally effective strategy: addressing low health insurance financial literacy among patients. 

This isn’t surprising given the complexity of healthcare in the United States. Only 2 in 5 US adults say they understand their healthcare plan very well. As the industry shifts toward greater transparency, patients have more information at their disposal, but comprehension remains a challenge.

That’s where healthcare providers can help. By promoting health insurance financial literacy, practices can directly improve RCM performance.

Why health insurance financial literacy is critical right now

Now is a crucial time to develop a patient financial literacy strategy. Several significant changes are set to affect patients as they enter the open enrollment period for 2026 Affordable Care Act (ACA) plans (November 1, 2025 to January 15, 2026). 

Some patients may no longer qualify for Medicaid or advanced premium tax credits in 2026. More urgently, the enhanced premium tax credits that have lowered marketplace plan costs for millions are set to expire at the end of 2025 as of the time of writing. This means many of your patients could face significantly higher premiums in the new year.

New opportunities are also on the horizon. Starting January 1, 2026, all bronze and catastrophic plans offered on the ACA Marketplace will qualify as high-deductible health plans, which will make enrollees eligible to contribute to a health savings account. This change creates a new avenue for patients to cover deductibles and coinsurance, which could reduce bad debt for your practice.

Also, CMS will expand access to catastrophic health insurance plans in the federally facilitated exchange (and in participating state-based exchanges). This will allow consumers whose projected incomes make them ineligible for advanced premium tax credits or cost-sharing reductions to access catastrophic coverage through a hardship exemption.

While it isn’t a provider’s obligation to be an insurance expert, fostering patient health insurance financial literacy has clear benefits, including:

  • Better trust and patient relationships
  • Fewer unpaid balances
  • A more positive patient financial experience

“As healthcare becomes increasingly complex, empowering patients with health insurance financial literacy is essential — not only for their peace of mind, but also for the financial health of medical practices,” Soma Mandal, MD, internist and women’s health specialist, New Providence, NJ, says. 

She adds: “When patients understand their coverage, costs, and options, they’re more likely to engage in their care, avoid surprise bills, and maintain trust in their providers. Simple educational strategies — like clear cost estimates, accessible resources, and well-trained front-desk staff — can make a significant difference in both patient satisfaction and revenue cycle performance.”

"As healthcare becomes increasingly complex, empowering patients with health insurance financial literacy is essential — not only for their peace of mind, but also for the financial health of medical practices."
Soma Mandal
MD, internist and women’s health specialist
Dr. Soma Mandal, reviewer for Tebra's The Intake

3 simple strategies with which to get started

Ready to get started? Here are 3 simple ways to improve patient health insurance financial literacy in your practice. 

1. Provide up-front cost estimates

Help patients understand their financial responsibility before their visit. Leverage tools like interactive cost calculators tied to payer contracts and a patient portal with real-time balances, payment plans, and insurance coverage details. Access to real-time benefit information is important for achieving patient financial literacy.

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2. Offer clear educational resources

Use patient surveys to identify confusion points. Based on the results, develop targeted resources, such as these:

  • Post a short video or infographic on your website or social media about how to read a medical bill or an explanation of benefits.
  • Provide printed handouts at check in, include a short explainer module to your check-in kiosk or tablet, or place a QR code on patient statements that links to short, helpful videos.
  • For patients with chronic conditions who face recurring costs, hold health insurance financial literacy workshops or webinars.

Whenever possible, translate financial literacy materials into the top 3 to 5 languages in your patient population.

3. Invest in front-office staff training

Empower your front-desk staff to explain balances and payment options clearly and empathetically. Provide them with scripts and FAQs to help them feel more comfortable and confident in discussing finances with patients.

To effectively improve health insurance financial literacy, your staff must be prepared to answer questions about deductibles, coinsurance, allowed amounts, out-of-pocket maximums, out-of-network rules, prior authorizations, HSAs, and more. 

Below are a few sample scripts you can use to jumpstart your efforts.

Front desk quick reference card: Patient financial literacy support

Keep this quick reference card at your desk to guide conversations with patients. Use empathy, avoid jargon, and know when to connect patients with billing specialists.

QuestionResponse
Why do I owe this balance?“This is the part of the bill your insurance didn’t cover, based on your deductible and co-insurance. Here’s where you can find it on your statement.”
What is a deductible?“Think of it as your yearly entry fee. You pay this amount before your insurance starts covering most services.”
What is a co-pay?“That’s a set amount you pay at the time of your visit, like a ticket for entry.”
What if I can’t pay today?“We have flexible payment plans and financial assistance options. Let’s review what might work for you.”
I’m confused about my EOB.“The explanation of benefits is not a bill. It shows what insurance paid and what you may still owe. Here’s how it lines up with your statement.”
Is preventive care free?“Yes, most preventive services like annual check-ups are fully covered, but it depends on your plan. I can show you where to check.”

The RCM benefits of patient health insurance financial literacy

Teaching patients the language of healthcare finance is not just a patient-friendly act, but also a strategic RCM intervention. Practices that directly address health insurance financial literacy can:

  • Lower claim denials
  • Accelerate collections
  • Reduce bad debt
  • Ultimately improve their cost-to-collect

Practices that address health insurance financial literacy directly will undoubtedly see RCM improvements over time. 

To learn more about how to enhance your RCM, view Tebra’s comprehensive RCM guide. Ready to simplify your billing? Power your private practice with Tebra’s HIPAA-compliant, all-in-one medical billing software. Learn more.

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Written by

Lisa Eramo, freelance healthcare writer

Lisa A. Eramo, BA, MA is a freelance writer specializing in health information management, medical coding, and regulatory topics. She began her healthcare career as a referral specialist for a well-known cancer center. Lisa went on to work for several years at a healthcare publishing company. She regularly contributes to healthcare publications, websites, and blogs, including the AHIMA Journal. Her focus areas are medical coding, and ICD-10 in particular, clinical documentation improvement, and healthcare quality/efficiency.

Reviewed by

Soma Mandal, MD

Dr. Soma Mandal is an ABMS board-certified internal medicine physician. She specializes in women’s health with an active practice in New Jersey. She obtained her MD from New York University School of Medicine, and has been listed on Castle Connolly’s top doctor lists in both New York and New Jersey for several years.

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