The changes to the health care landscape seen in the past several years have been significant, and that often requires consumers to know more about various aspects of their health insurance coverage than they used to. Unfortunately, it seems that many of them aren't quite as brushed up on various industry terms as they perhaps need to be, and more worrying, they think they understand these issues better than they actually do.
For instance, nearly 3 in 4 consumers in major cities say they "definitely understand" what a health insurance deductible is, but in reality only half could actually describe it, according to a recent survey from PolicyGenius and Radius Global Research. Similar results were observed for co-pays (83 percent felt they knew what it was, but only 52 percent did), coinsurance (47 percent perceived knowledge, 22 percent demonstrated it) and out-of-pocket maximums (67 percent thought they knew, only 42 percent actually did).
A big issue
The average across all these issues was 68 percent of people thinking they knew what these terms meant for them, but just 42 percent could define them, the report said. In fact, only 4 percent of those polled were able to correctly identify all four terms.
This issue was particularly pronounced among millennials, for whom demonstrated knowledge averaged only a little more than 1 in 3 respondents, the report said. Meanwhile, 47 percent of baby boomers - who have had coverage for decades - could do the same. Further, 72 percent of male respondents felt they could properly define certain terms, versus just 64 percent of females, but the actual knowledge they showed was slimmer: 44 percent to 41 percent, respectively.
However, this might also be an issue for the insurance industry to address, because just 2 in 5 respondents said they felt they were equipped to choose the plan that worked best for them, the report said.
Meanwhile, experts also caution that it's more important for people to understand their health insurance than ever if plans to repeal some or all of the Patient Protection and Affordable Care Act, because there's a potential for millions of Americans to lose the coverage they've been able to obtain through the law's mandated exchanges, according to the Center on Budget and Policy Priorities. In all, 11 million Americans with low incomes spread across 31 states and the District of Columbia would lose their coverage if the ACA is eliminated.
This would be true not only because people bought plans through the state and federal marketplaces, but also because the ACA significantly expanded Medicaid protections in many states, the report said.
For these reasons, it may be vital for insurers to reach out to policyholders and help them better understand their coverage on an ongoing basis and figure out the best way to proceed no matter what policy decisions are made in the months to come.