Despite efforts to educate consumers about how health insurance
works and what's ahead with Obamacare, most Americans are confused
-- according to research by LIMRA, an insurance trade
LIMRA recently asked 2,000 consumers to take a 10-question
on health insurance, and the results were dreadful.
About 80 percent of the test-takers flunked, answering five or
fewer questions correctly, and only 10 percent got at least seven
questions right. Uninsured consumers fared the worst, answering on
average only three or fewer questions correctly, but insured
consumers didn't do that much better.
The scores are especially grim, considering it was a true or
false quiz, says Anita Potter, assistant vice president of LIMRA
"They had a 50-50 chance at guessing right," she laments.
Stumped about deductibles
Consumers had the toughest time with this one:
The deductible is the amount you pay out of your own pocket for
health care for each visit before the insurance company or health
plan pays the rest of the costs.
Only 15 percent had the correct answer: False. The deductible
does come out of your pocket, but it's the fixed amount you pay
during the benefit period, usually a year, before the health plan
starts to pay for covered services.
The largest portion of test-takers got this question right:
A PPO (Preferred Provider Organization) is a health plan that
contracts with doctors, hospitals and other health care providers
to offer medical services to its members.
Sixty-nine percent of people gave the correct answer: True.
In addition to the quiz, LIMRA gave some hypothetical situations
health insurance coverage
, including the dollar amounts for deductible, co-payment and
coinsurance, and how those would apply for a covered medical
service. Participants were asked to calculate how much their
out-of-pocket costs would be. Only 25 percent came up with the
Much attention has focused on helping people enroll in health
plans for 2014 when virtually everyone is required to have health
insurance. U.S. Health and Human Services Secretary Kathleen
Sebelius recently announced $150 million in grant awards to more
than 1,000 health centers to enroll uninsured Americans in new
health plans made available by the Affordable Care Act. The health
centers will help consumers understand their coverage options,
determine eligibility for public programs or financial assistance,
Such enrollment efforts are good, Potter says.
"But the problem is, do they know what they're enrolling
LIMRA's survey found that most consumers think the plans
available through the new insurance marketplaces, formerly called
exchanges, are plans operated by the government. Only 14 percent
knew that the plans will be offered by private health insurers.
Potter is concerned that consumers will judge health plans by
the cost of the premium alone and won't understand how the plans
work. A multi-pronged approach involving government, health care
providers, employers, health insurance companies and agents is
needed to educate consumers, she says.
"It's imperative because they're going to have multiple
choices," she says.
Uninsured Americans aren't the only ones who will have to sort
through their options. Many workers now face a choice of plans
offered by their employers. Enrollment in a work-based plan
involves more than just clicking a box yes or no for health
"Consumers themselves have to take more responsibility, too,"