Bruce Japsen | March 13,2016
Even as millions of Americans gain health insurance coverage, they lack understanding of basic terms that impact their out-of-pocket costs and whether a doctor is even available to them.
A new analysis by Rice University shows one in four adults in Texas “lacked confidence in understanding” the most basic terms related to health costs such as “premium,” “deductible” and “copayment.” And 45% don’t understand “coinsurance” and 30% don’t understand “provider network.”
The analysis has national implications given the state’s size as well as the nationwide trend of employers to shift more costs onto workers via higher copayments and deductibles–the very cost-sharing strategies people don’t understand. Plans offered under the Affordable Care Act are also shifting costs onto policyholders.
“We are going to see this everywhere in the country because if you look at just the insured people in our survey, there is still a substantial lack of understanding in using and understanding these terms,” Vivian Ho, chair in health economics at Rice’s Baker Institute for Public Policy, which funded the study along with the Episcopal Health Foundation, said in an interview.
The report also comes during a period of unprecedented change in healthcare as millions more Americans who have obtained coverage under the health law see copayments and deductibles–what they pay out of pocket to get treatment–rise even as they shop for a better deal on public exchanges. To get a lower premium, which is what they pay monthly to the insurer, they often have to endure a higher deductible or other out-of-pocket costs.
The lack of confidence in understanding healthcare terms was more pronounced among the uninsured. Half, or 50.7%, of those without coverage didn’t understand the term “premium” compared to 21.8% of those with insurance who lacked understanding of the term.
“The challenging thing about the (ACA) marketplaces is that they are offering skinnier plans relative to what employers provide,” Ho said. “If you don’t know what your deductible is or what your maximum out-of-pocket costs are, you are going to be disappointed when you go to use your insurance.”
The study included people that had insurance as well as those uninsured. Thus authors say it is an indication employers aren’t doing a good job educating their workers about health benefits.
Employer groups admit they need to do more to help employees navigate health benefits and explain coverage.
“This report is consistent with our own findings, in that buying health insurance online can be one of the most difficult purchasing events a consumer has,” said Larry Boress, president and CEO,Midwest Business Group on Health, a national employer coalition that includes Boeing ,Caterpillar CAT , Ford Motor and Walgreens.
“In many cases, people look only at the lowest premium costs in selecting a health plan, when, in fact, the out-of-pocket annual expense should be their focus if cost is their primary concern,” Boress said. “Employers and government programs need to spend more time and resources preparing people to use the health benefits and decision tools they provide, otherwise, these benefits and tools are not fully maximized nor do they provide the results intended.
Source: Forbes