US scores low on health-insurance literacy

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Maggie and Michael sound bite

Americans have their homework cut out for them before Oct. 1, the start of open enrollment for health plans offered under the Affordable Care Act. According to a survey released today by the American Institute of CPAs, many don’t understand some key, basic facts about health insurance. The telephone survey of 1,008 U.S. adults, conducted by Harris Interactive, found that 51% could not accurately define at least one of three common terms: premium, deductible and co-pay.

Maggie and Michael spoke with Marketwatch reporter Elizabeth O’Brien about this story:

This knowledge gap comes as the country prepares for the biggest overhaul of our health insurance system in decades. Starting on Oct. 1, consumers will be able to shop for individual health plans on the state-level marketplaces established under the Affordable Care Act, for coverage that begins Jan. 1. The marketplaces promise easier side-by-side comparisons of plans than ever before.

But before people can compare their options, they need to understand the terms on which they’re comparing them. Premiums are the fees paid, usually monthly, to a health insurance company for coverage. Co-payments are fixed dollar amounts paid at the point of service, for example, $20 to see a primary care doctor and $30 to see a specialist. Meanwhile, a deductible is the amount of money patients must pay before their insurance company makes payments; many large group employer plans have deductibles in the $300 or $400 range, but they can go much higher.

Indeed, health plan literacy matters to everyone, not just the millions expected to purchase individual plans on the state-level exchanges. Fall is open enrollment season at many employers, as well as for Medicare Advantage plans, and workers need to know the basics to evaluate their options.

Online Resources
Covered California
California Department of Insurance
California Healthcare Foundation
Centers for Medicare and Medicaid Services
The Henry J. Kaiser Family Foundation
Kids Well Campaign
State Refor(u)m

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