Nearly Half of Uninsured Don't Understand Basic Health Insurance Concepts

Although open enrollment for the Affordable Care Act's insurance Marketplaces is almost here, a 10-question survey from Kaiser Family Foundation found that the health law's target audience still struggles with understanding insurance coverage.

Although open enrollment for the Affordable Care Act (ACA)’s insurance Marketplaces is almost here, a 10-question survey from Kaiser Family Foundation found that the health law’s target audience still struggles with understanding insurance coverage.

Nearly half of uninsured individuals incorrectly identifies such terms as “premium,” “deductible,” and “provider network.” More than half had trouble calculating how much they would have to pay for a hospital stay or an out-of-network lab test even with insurance coverage.

“Perhaps most importantly, given that open enrollment is around the corner, this survey uncovered a significant information gap among the uninsured, with substantial shares expressing a lack of familiarity with health insurance terms and concepts,” the study’s authors wrote.

In the example of how much an insured individual would have to pay for a 4-day hospital stay with a total bill of $6000 with a $1000 deductible and a $250 per day copay, 39% of uninsured respondents answered incorrectly, and 27% said they didn’t know.

While 76% of total respondents were able to define “health insurance premium” only 33% were able to define “health insurance formulary.” Furthermore, 59% did not know that not all doctors who provide care at an in-network hospital may be in-network.

Nearly half (47%) of uninsured respondents between the ages of 18 and 64 received low scores (4 or less answers correct) while 58% of their insured counterparts received high scores (7 to 10 answers correct). Men and women score almost evenly, with both receiving a mean score of 5.8 correct answers.

“Younger adults, those who haven’t attended college and the uninsured score somewhat lower on these basic measures of health insurance literacy,” the authors concluded. “As more people gain insurance under the ACA, these individuals may need extra help navigating their plans, particularly if they are becoming insured for the first time.”