Some consumers still struggle to understand health insurance

Millions of Americans have gained access to health insurance in the wake of the Patient Protection and Affordable Care Act's coverage mandate, but issues still linger for many of those people. Among the problems people may experience even after getting coverage is that they don't really have a strong understanding of what they're buying, and that, in turn, can create major issues.

Indeed, a recent poll of Texans about the ins and outs of health insurance found that 1 in 4 respondents felt as though they didn't have a firm grasp of basic health insurance terms like “provider network,” and “premium,” according to a study from the Episcopal Health Foundation and the Baker Institute for Public Policy at Rice University. This was particularly true of consumers who had lower incomes, still didn't have insurance, or were Hispanic.

“This research shows that understanding the key parts of a health insurance plan can be tough, especially for the uninsured,” said Elena Marks, president and CEO of the EHF, and a nonresident health policy fellow at the Baker Institute. “These numbers illustrate the continuing need to offer education and outreach targeting the uninsured so they can better understand their health insurance options.”

It's a serious concern when people don't understand health insurance terms related to cost.

A closer look at the numbers
Further, about half of those who still don't have insurance were unable to identify five of the seven basic health insurance terms given to them, and while it may not be surprising, the lack of confidence that they could identify those terms was roughly double that of people who did have health insurance, the report said. Along similar lines, more than 2 in 5 Hispanic respondents said they had a lack of understanding for all those terms, well above that of other races, which is a problem in Texas because of what a huge minority Hispanics comprise.

Getting specific
Consumers seemed to struggle most when it came to understanding health insurance terms as they related to the cost of coverage and care, the report said. For instance, about 1 in 4 people surveyed said they didn't understand terms like “premium,” “deductible,” and “co-payment,” the report said. More than 1 in 3 felt the same way about “maximum out of pocket expenses,” and nearly half said they didn't understand “co-insurance.” Further, 3 in 10 said they weren't sure they knew what “provider network” and “covered services” meant.

Marks noted that these difficulties applied to consumers both with and without health insurance themselves, which may be problematic as more costs are shifted onto consumers and away from the businesses that get them their insurance, the report said. Likewise, that issue will also necessarily extend to consumers who buy coverage on their own through federal exchanges.

For these reasons, the more health insurers can do to help people understand the ins and outs of coverage and what even basic terms mean, the better off both they and their policyholders are likely to be in the future.