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Consumer Education Key for Health Insurance Marketplace Success

The study found that those who purchased individual health plans through the health insurance marketplace had more trouble understanding simple insurance terms.

By Vera Gruessner

It seems that those residing in Texas who have purchased their healthcare coverage through the health insurance marketplace do not have as much understanding of certain terms as those who have medical insurance through their employer or via Medicaid or Medicare, according to a study completed by the Episcopal Health Foundation (EHF) and Rice University’s Baker Institute for Public Policy.

Individual Health Plans

The results from the study show that the number Texans who purchased individual health plans through the health insurance marketplace has risen 78 percent from the year 2013 to 2015. When it comes to the Affordable Care Act’s federal health insurance exchange, 1.3 million Texans obtained coverage through these means.

Nonetheless, the study found that those who purchased individual health plans through the health insurance marketplace had more trouble understanding simple insurance terms like premiums, deductibles, and co-payments.For instance, only one out of  four poll takers with employer-sponsored health insurance did not understand the term “maximum out-of-pocket expenses” while more than 42 percent of Texans who had individual health plans had trouble understanding the concept.

More importantly, the study discovered that those who purchased individual health plans through the federal or state exchanges had more difficulty understanding how to use their coverage plans.

“The long-term success of the Affordable Care Act depends on people buying, using and experiencing satisfaction with health insurance,” Vivian Ho, the Chair in Health Economics at the Baker Institute and Director of the institute’s Center for Health and Biosciences, a Professor of Economics at Rice and a Professor of Medicine at Baylor College of Medicine, stated in a news release. “The lack of understanding about the basic financial and coverage provisions of health insurance plans can lead to surprise and frustration. That can undermine efforts to increase coverage.”

READ MORE: ACA Health Insurance Exchanges Bring Challenges for 2017

A total of 51 percent stated they didn’t know the costs associated with seeing a healthcare provider outside of the network covered by their health insurance company. Additionally, almost half - 46.1 percent - said they didn’t know what type of services counted as preventive, most of which are now part of a health plan’s coverage with no extra cost.

While there were consumers who had Medicare, Medicaid, or employer-sponsored coverage that did have difficulty understanding basic health insurance terms, the results showed that one-third fewer of these particular groups struggled with these difficulties when compared to Texans who purchased individual insurance plans.

This study illustrates the importance of consumer education and the need for healthcare literacy among patients countrywide, explains Elena Marks, EHF’s President and CEO and a Nonresident Health Policy Fellow at the Baker Institute.

“The unfortunate irony is that those with individual health insurance plans are the least likely to understand the basic terms, but they have the greatest need to understand them,” Marks said in a public statement. “This group has to choose from a variety of health insurance options and pay much more of the cost of their insurance. It’s critical that they understand what they are buying.”

This survey is the 20th report in a series of studies conducted by Rice University’s Baker Institute for Public Policy and EHF after the Affordable Care Act was established in the state of Texas. The report outlines that improving health literacy is imperative if the Affordable Care Act is to continue expanding coverage and healthcare access through the health insurance marketplace.

READ MORE: How a Public Option May Preserve Health Insurance Exchanges

“It’s important for all Americans to better understand this complex system so that they can make the best decisions about health insurance and healthcare choices for themselves and their families,” Marks concluded. “Those who’ve worked diligently to expand enrollment in health coverage must help the newly insured understand their plans.”

The biggest issue uncovered may deal with the fact that many in Texas who have purchased individual plans lack the understanding needed to know how to properly use their coverage.

The survey shows that approximately 56 percent of Texans had employer-sponsored insurance in September 2013 as well as in September 2015. While in 2013 only 10.3 percent of Texans had individual insurance plans, that number rose to 18.4 percent by 2015.

The results showed that 30.1 percent of those with individual plans lack understanding of the term ‘premium,’ 33 percent are unsure of the term ‘deductible,’ and 48.4 percent do not know what co-insurance means. One out of four Texans with individual insurance plans are unaware of what ‘provider network’ means for their medical care.

Additionally, more than 40 percent are unaware of what ‘max out-of-pocket costs’ mean and one out of four are unsure of the definition of ‘covered services.’ More importantly, large numbers are finding it difficult to utilize their medical coverage plans.

READ MORE: 70% of Uninsured Texans Find Medical Coverage Costs too High

For instance, nearly 20 percent of Texans with individual plans are unsure of how to find a doctor or provider. About 40 percent find it complicated to figure out which medications are covered under their plan while 46.1 percent don’t understand which services count as preventive care.

“The fact that all of the plans now are required to cover a basic set of preventive services means that, even if you have a high-deductible plan, those services are covered with payment of the premium,” Marks told HealthPayerIntelligence.com.

“So you have people getting check-ups and routine age- and gender-appropriate screenings for cancer and other conditions. You have women getting contraceptives without any copays or charges against the deductible. So even if you have a high-deductible plan or a plan with significant copays, the way the plans are set up now, there is a set of benefits you get just for being enrolled and paying the premium.”

“Even if you were insured, there may have been copays or deductibles applied to some of those preventive services that are now required by law to be included in the basic premium coverage.”

Essentially, improving healthcare literacy is an imperative for both the federal government and health payers around the country. Only then will consumers be able to choose the best plans for themselves and healthcare spending may decrease.

Image Credits: Episcopal Health Foundation

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