Several trends contribute to the problem.

Low health care system literacy is on the rise. People with low literacy cannot correctly identify terms related to their health insurance coverage, including premium, deductible, copayment, coinsurance and out-of-pocket maximum. They don't understand the difference between in-network and out-of-network and how to find in-network doctors; are unaware of the benefit differences in their plan if they choose an out-of-network provider; and do not know what a prior authorization is or how to get one.

Emergency room use is up. Low-literacy people visit the ER more often. Those with a chronic condition were two times more likely to have received care at the ER in the last year than their high literacy peers, and generally healthy people with low literacy were nearly three times more likely to have visited the ER. According to the study, this adds up to $47 billion in avoidable medical spending each year.

The problem could get worse. The impact may grow in coming years, especially given the nature of the COVID-19 virus, which remains a public health threat. When asked about the likelihood of getting the COVID-19 vaccine, people with the highest level of health-care system literacy were 25% more likely to be very willing to get it than people with low literacy.

People choose the path of least resistance. In a system riddled with puzzling terminology, confusing rules and regulations and opaque processes, people are defaulting to the ER for its accessibility. It's easier than trying to navigate a complex system that refuses to meet them halfway.

The report makes several recommendations to address low literacy.

• Simplify health care insurance products with people at the center. Without understanding the basic design and function of their health plan, they don't have all the information they need to make informed decisions about how and where to receive care.
• Commit to transparency in pricing and quality information. The cost of health-care visits and procedures traditionally has been a black box for people. Health plans that capitalize on new price transparency regulations can help.
• Lean on providers to cut through complexity together. Doing this can mean confirming that communications from providers are clear and consistent in how they reference pricing and the best use of various care sites. They must involve the use of shared incentives to improve access and reduce cost.
• Reimagine experiences from a human-centered lens. This means combining human and digital guidance to design experiences, products and workflows from an "outside-in," "walk in others' shoes" perspective. However, payers must ensure they don't over-index on surface fixes as substitutes for the systemic changes that are necessary to address complexity in meaningful and lasting ways.

"Complexity is an entrenched problem in health care that impacts payers, providers and people," the report concluded. "Solving it will take fundamental transformation, not simply financial incentives or design bandages. But if health payer organizations use simplicity and humanized health care as their touchstones for making change that improves care, they can finally start cutting through complexity — and cutting costs."

Read more: 

• Consumers are still confused about health plans and savings
• Improving health literacy year-round: Benefits communication planning for 2021
• Women, younger retirees most concerned about future health care