Health Insurance Navigator

By Lisa Zamosky

With all the discussion over the past few weeks about the complexities of health reform and the Supreme Court hearings, a recent survey conducted by Kelton Research on behalf of online insurance brokerage, eHealthInsurance.com, suggests that when it comes to health insurance, it pays to go back to basics.

Although people claim to place a significant value on their health insurance and recognize it as an important financial safety net, they don’t understand its details particularly well.

In fact, according to the Kelton survey, which included a sample of more than 1,000 adults over the age of 18, even the most basic insurance terms are poorly understood. Here are some of the survey’s highlights:

• 45% of those surveyed could not explain the meaning of the term “deductible”
• Only 41% were able to define the term “premium”
• A mere 25% were able to explain what “coinsurance” means
• 19% could not define a number of other common insurance terms, such as “out-of-pocket limit,” “open enrollment,” “PPO,” “HMO,” and “HSA”

Why Should I Care?

Nearly 70% of Americans believe that their personal financial security depends, in part, on having health insurance, the survey found. Yet, utilizing insurance to your greatest financial advantage without understanding how your health plan works, what your total health care costs will be, and how to access that information is virtually impossible.

Although 45% of those surveyed said the cost of their insurance premium – the bill they pay each month for their health plan – was the main factor when deciding which health plan to buy, only 46% could actually state, within $10, how much they were paying each month for their health plan. By contrast, 68% were able to state how much their cell phone bill cost each month.

A Financial Reality Worth Your Attention

One of the few guarantees in American life is that health care costs continue to rise. Early projections of a study just released by health consulting firm Milliman Inc. (the annual Milliman Medical Index) suggests that the cost of an employer health plan for a family of four will be about $20,000 this year, up from just more than $9,200 only a decade ago.

Also, an average family of four now pays $3,280 each year for medical expenses their health insurance doesn’t pick up. That’s 9.2% more than last year.

The type of insurance you choose, and even how you go about getting your medical care is all influenced by the degree to which you understand what your health plan covers. A lack of knowledge frequently leads to higher costs.

For a full list of health insurance terms, you can visit the Patient Advocate Foundation’s glossary of terms.

Share your story: what keeps you from learning more about your health plan’s details?