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Most Americans Don’t Grasp Basic Health Insurance Concepts



December 18th, 2013
by Tracy Gnadinger

The Urban Institute’s Health Reform Monitoring Survey (HRMS), initiated in 2013, is a valuable way to obtain early data about the American public’s ability to understand health insurance concepts and the Affordable Care Act (ACA), before federal government survey data are available. A new Health Affairs Web First study provides results from the round of the survey that was fielded in the summer of 2013. The survey found that more than 60 percent of the target market for the health insurance exchanges indicated that they did not understand key concepts related to health insurance.

Among the population targeted by the exchanges, only 39.9 percent of respondents understood all nine key concepts: premiums, deductibles, copayments, coinsurance, maximum annual out-of-pocket spending limits, provider networks, covered services, annual limits on services, and noncovered or excluded services. Only 23.6 percent of uninsured respondents, and less than a third of those ages 18–30, were confident that they understood these concepts. The HRMS results are based on a nationally representative, probability-based Internet panel that is fielded each quarter.

Another important finding: respondents reported their primary source of health insurance information was interpersonal—friends, coworkers, and family members. These sources could share the target population’s confusion about key insurance concepts. Although knowledge gaps appeared across many different types of individuals, confidence in understanding these concepts was lower among young adults, Spanish speakers, the uninsured, and people who had lower levels of education.

According to the authors, “confusion around these concepts would make it difficult for consumers to understand trade-offs between different health insurance plans and to choose the plans that best meet their needs.” Moving forward, they suggest that “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.”

Authors Sharon Long, Genevieve Kenney, Stephen Zuckerman, Dana Goin, Douglas Wissoker, Frederic Blavin, Linda Blumberg, Lisa Clemans-Cope, and John Holahan are affiliated with the Urban Institute in Washington, D.C.; Katherine Hempstead is with the Robert Wood Johnson Foundation, in Princeton, N.J.

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2 Responses to “Most Americans Don’t Grasp Basic Health Insurance Concepts”

  1. Ted Yan Says:

    That doesn’t surprise me, insurance is very complex.

  2. Dianne Says:

    Makes sense that most consumers would not really understand these concepts. It is quite complex to the layman.

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