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Health insurance knowledge key to making best decisions

Health Care and Health Insurance
by Steve Bryson
More changes for health insurance laws in the near future?
More changes for health insurance laws in the near future?

Tens of millions of Americans make critical decisions about their health insurance each year, whether they're buying coverage on the exchanges or changing plans they receive through their employers. Problematically, though, it seems that many people don't fully understand the ways in which these policies work, or even basic terms associated with them. And more worrying is that shoppers generally think they know exactly how best to navigate these issues.

Anecdotal and even some scientific evidence shows that people generally don't know as much about how health insurance works as they actually think they do, and that can lead to some major problems when it comes to signing up for the coverage that best fits their needs, according to a report from the St. Joseph News-Press. For instance, it can lead them to select plans with lower premiums and higher deductibles that can cost them dearly even if they're trying to address basic health care needs.

People may not understand health insurance as much as they think they do, and that can create problems.People may not understand health insurance as much as they think they do, and that can create problems.

A widespread issue
Through the end of 2014 - the most recent year for which full data was available - some 33 million Americans didn't have health insurance, the report said. A healthy portion of those were young people - slightly fewer than 1 in 5 go without coverage. There are also those who fall into the so-called "Medicaid gap" that affects millions of workers living in places where Medicaid programs weren't expanded when the rest of the Affordable Care Act was enacted.

Those people may also be the most likely to not fully understand such coverage, especially if they have limited experience with buying it in the past, the report said. And if they're on limited incomes, the hunt for something affordable can be an additional hindrance to finding the best possible plans for their unique situations.

"That does hinder their ability to pick a plan because a lot of times all they are seeing is the price of the plan," Graff said. "They want whatever is cheapest without understanding that plan, if you actually go and use it, it is actually going to end up costing you more in the long run."

Why is this important now?
When it comes to the cost of coverage, knowing as much as possible about how insurance works may be particularly important when premiums are rising sharply. For instance, they're slated to increase by an average of 19.1 percent in Florida, according to the state's Office of Insurance Regulation. That exceeded the average rate change requested (17.7 percent). And in terms of actual dollars and cents, that brings the average monthly premium price to about $458 for average Floridians, up from $385 this year.

When these kinds of changes go into effect, it may be vital for health insurers and brokers to make sure their clients know why those changes are happening, and what they generally mean for people in terms of both their financial and physical well-being. The more that can be done to educate consumers in this regard, the better off all involved will be going forward.

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