What You Don't Know About Health Insurance May Cost You

What You Don't Know About Health Insurance May Cost You
What You Don't Know About Health Insurance May Cost You

When it comes to health care, it sometimes feels like nothing is simple. And that can be a real problem: According to a recent survey, some health care basics are going right over the heads of many Americans.

For example, only 55% of those surveyed felt sure that they knew what a deductible is. Fewer still said they could define or explain terms like premium (41%) or coinsurance (25%).

"This is significant because these terms describe money coming out of consumer's pockets toward their own health insurance coverage and medical care," says Brian Mast, vice president of communications at eHealthInsurance, which sponsored the Kelton Research survey.

And when it comes to the Democrats' health care reform plan, all the media coverage about it may not be getting through to people. Only 45% of those surveyed realized that adult children are already able to stay on their parents' health insurance plan until they're 26. By contrast, 42% believe that people with pre-existing medical conditions can no longer be declined coverage by insurers, but that aspect of the legislation won't go into effect in 2014. Further, nearly 30% believe that people without employer-provided health insurance are required to purchase coverage now -- that won't be the case until 2014 either.

"It is a scary thought that many Americans continue to not know what's available to them as a result of the Affordable Care Act," says Ankeny Minoux, president of the nonprofit Foundation for Health Coverage Education. Their health insurance status is at stake. Without proper protection, many people suffer severe financial hardships from unforeseen medical expenses.

Devil of a Time with the Details

Beyond the big-picture misunderstandings, astonishing numbers of people are at a loss for the details of what they personally spend their health care dollars on. Fully 83% of those surveyed were unable to say for sure if their plans covered doctor's office visits, and 80% weren't sure about prescription drugs. There was confusion too, about whether their plans covered diagnostic services like sonograms, MRIs, X-rays, overnight hospital stays or immunizations.

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Much as people like to groan about the high cost of health insurance, only 47% of those surveyed even knew how much they contributed from their salary toward their premiums, and about a third could say how much they paid toward the monthly premiums of their spouses and children. And as for how much their employers chipped in, only 18% knew.

Distressingly few people review their health insurance on an annual basis -- only 36%. "They were more likely to make an annual review of their cell phone (40%), and Internet (39%) costs than their health insurance," says Mast. "For most of us, annual health insurance and medical expenses are a lot greater than our phone and Web access expenses."

How can you know if you're getting the most out of your health insurance dollars if you don't know what you're paying? Can you find more affordable coverage options for healthy dependents? Are health insurance costs equitably split between you and your company? If you don't know the answers to those questions, you're doing your wallet no favors.

If you don't know what you don't know, study up. Start by getting more informed about healthcare reform, and tapping resources like the Foundation for Health Coverage Education, the Department of Labor's Employee Benefits Security Administration, or www.ehealthinsurance.com and their free book, Individual Health Insurance for Dummies.

Before signing up for coverage, consult a health specialist to make sure you are making the right decisions. The U.S. Uninsured Help Line can answer general questions about programs, eligibility requirements, benefits, costs, and you can get a referral to a health insurance broker in your area who has signed on with the nonprofit's volunteer network to help you work through the health care maze.

Being confused by health care can be costly -- so get the facts.