Many uninsured populations don’t understand basic health insurance terms, survey finds

As more adults are being charged with taking responsibility for their healthcare costs and outcomes, a recent survey suggests that many don’t have a clear understanding of what many health insurance terms mean.

There seems to be an information gap between adults with insurance and those without insurance, according to the Health Reform Monitoring Survey (HRMS) published in the December 2013 issue of Health Affairs. Only 32% of uninsured adults where confident that they knew what ‘coinsurance’ was, while more than 63% of adults with insurance knew the term. About 42% of uninsured adults new the definition of a ‘provider network,’ while 78% of insured adults knew the phrase’s meaning. Similarly, about 45% of uninsured adults knew the meaning of ‘annual limits on service;’ nearly 74% of insured adults could define the term.

Overall, less than half of insured adults and only 24% of uninsured adults were comfortable with all nine of the most common insurance terms, including ‘deductible,’ ‘premium,’ and ‘copay.’

The HRMS launched this year and will continue into 2014, as the most sweeping Affordable Care Act provisions are being implemented. Over the summer, the survey found that more than 60% of those being targeted to sign up for health insurance exchanges didn’t have a basic understanding of health insurance.

“This raises concerns about some people’s ability to evaluate trade-offs when choosing health insurance plans. Assisting people as they attempt to enroll in health coverage will require targeted education efforts and staff to support those with low health insurance literacy,” the study’s authors said.

The study found that some of the most sought- after demographics for health insurance-young adults, Spanish speakers, and those with low income-had the least confidence in understanding healthcare insurance terms. The study notes that reaching these populations is tough because many in those groups get their information about healthcare insurance from friends, family, and coworkers, not rather than consumer groups or government websites.

“Websites, navigators, in-person assisters, call center operators, brokers, and agents should therefore not assume high consumer comfort levels with any of these terms,” the study’s authors said.

Though more than 500,000 people have signed up for health insurance through exchanges since October, there are an estimated 47 million people without health insurance in the U.S. Uninsured people have until March 2014 to sign up for individual insurance, or face a penalty tax.