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Ignorance may be bliss for health insurance consumers. Many Americans say they’re happy with their health insurance, but that doesn’t mean they understand it.
A recent Forbes Advisor survey of 2,000 Americans who have health insurance found that over three-quarters can’t identify the term “coinsurance” and nearly half incorrectly defined copayment and deductible. That’s just the beginning of their confusion about the U.S. health insurance system.
The survey also found fairly significant knowledge gaps about open enrollment, Health Savings Accounts and medical billing.
Confusion About Health Insurance Terms
More than three-quarters (77%) misunderstand coinsurance
Coinsurance is the portion of the bill that a health plan member splits with an insurer after the member reaches their deductible. Coinsurance is often 20%/80%. That means the member pays 20% of the bill after reaching the plan’s deductible, and the health insurance company picks up the other 80% until the member hits the plan’s out-of-pocket maximum.
The survey found that only 23% correctly could identify the correct definition of coinsurance from a range of choices—and nearly one-third didn’t even want to take a guess.
Younger people surveyed (those ages 18 to 25) were especially unclear about coinsurance, with 41% saying they didn’t know. Only 20% of that age group answered correctly, which was slightly lower than the other age groups.
Women were twice as likely as men (36% to 18%) to say they didn’t know, but men (24% to 7%) were more likely to confuse coinsurance with a copayment.
Coinsurance for health insurance is:
Nearly half (46%) don’t know what a health insurance copayment is
Coinsurance wasn’t the only confusing term for respondents. Only slightly more than half of those surveyed (54%) correctly identified a health insurance copayment. A copay is a flat fee you pay every time you receive covered health services. For example, that could be a $30 copay when you see a primary care physician, or $60 if you see a specialist.
Many respondents confused copayments with other health insurance terms, and 6% didn’t want to guess.
Less than half of younger respondents (ages 18 to 25) answered the question correctly, while more than half of each other age group got it right.
A copayment in health insurance is:
Almost half (45%) can’t identify what a health insurance deductible is
A similar percentage of people could correctly identify a health insurance deductible. A deductible is what you pay for medical care before a health insurance plan begins paying for your care. If you have a $1,000 annual deductible, you must reach that amount before your health insurance company begins paying.
Younger respondents again were less likely to identify a deductible compared to other age groups. Only 40% of those ages 18 to 25 answered correctly.
Women picked the correct deductible definition more than men (59% to 45%). Over one-quarter of men confused a deductible with a copayment compared to just 11% of women.
A health insurance deductible is:
Misunderstandings About Health Savings Accounts
A Health Savings Account (HSA) lets you save for your health care costs tax-free. HSAs are only available when you have a high-deductible health plan, and employers often contribute money to these accounts to help employees with their health costs.
When asked what they know about HSAs, respondents could choose as many responses that they believed applied. Slightly more than 40% correctly answered that an HSA lets you set aside money on a pre-tax basis to pay for qualified medical expenses or that an HSA can pay deductibles, coinsurance and copays.
Other respondents seemed to confuse HSAs with flexible spending accounts (FSAs). They incorrectly said you can set up an HSA with any health plan, you lose HSA money if you don’t use it in a year and that you lose your HSA if you switch jobs. Those are actually all facts about FSAs and not HSAs.
Which of the following is true about health savings accounts (HSAs)? (select all that apply)
44% Lack Knowledge About Children on Parents’ Health Plans
Many respondents also didn’t fully understand how long they can keep children on health plans. The Affordable Care Act lets parents keep children on their health plan until they turn 26.
Almost one-quarter of respondents incorrectly thought that the child still had to live at home to remain on a parent’s health insurance until they turn 26.
Can children under 26 usually be covered as a dependent under a parent’s health insurance plan?
Many Unaware About Qualifying Events for Special Enrollment
You can usually only get health insurance during an open enrollment period or if you qualify for a special enrollment period.
The survey asked when you can change health insurance plans and found that many correctly said the following can trigger a special open enrollment period:
- Switching jobs
- Having a baby
- Getting married
- Losing a job
- Getting divorced
But nearly 30% incorrectly believed that not liking a current insurance plan or getting diagnosed with a new medical condition would make someone eligible to change health insurance at any time. That’s not the case.
Nearly 20% guessed that moving can allow you to change health insurance. That could be correct, depending on where the person is headed. If you move out of state, you’re likely eligible to buy different health insurance. If you’re just moving within the same area, you probably won’t be able to change health plans.
Gaining weight and buying a house were mistakenly chosen as qualifying open enrollment events by 11% of respondents.
The following are commonly acceptable reasons for buying health insurance any time of the year: (choose all that apply)
Medical Bills Causing Confusion
Medical bills have affected many of the respondents in the survey—both in their bottom lines and in their knowledge bank. At least 21% of people surveyed said they were confused about a medical bill they received. Men were more likely to say they were confused by a medical bill than women.
What do you do after you receive a medical bill you didn’t expect or don’t understand? One-fifth of respondents said they didn’t pay a medical bill until they reviewed it with their doctor’s office and insurance company. Younger respondents (age 18 to 41) were more likely to say they didn’t pay until a review.
Surprise medical bills may become less of a problem this year after Congress passed the No Surprises Act that looks to tackle out-of-network-related surprise bills. The legislation is for patients who receive unexpected medical bills after an emergency visit at an out-of-network facility or after getting care from an out-of-network provider at an in-network facility.
Though the No Surprises Act may help people who get an unexpected bill because of an out-of-network charge, some Americans (19%) are struggling with paying other medical bills. Women more than men said they didn’t pay a medical bill because they couldn’t afford it (23% to 9%).
Related: Medical Debt: Everything You Need To Know
Have you ever done any of the following when you received a medical bill: (choose all that apply)
Most People Happy with Health Insurance Plan
Although survey respondents are confused by medical bills and many don’t have a full grasp on health insurance terminology, the vast majority of those surveyed said they’re happy with their health plans.
That includes 91% of men who said they’re either very or somewhat happy with their health plan compared to 82% of women. Only 2% of men said they’re very or somewhat unhappy with their plan.
How happy are you with your health insurance plan?
For those who are unhappy with their health plan, the biggest complaint involved costs, both out-of-pocket costs and health insurance premiums. Another significant percentage said their unhappiness is centered around not being sure what their plan covers.
Why are you unhappy with your health insurance plan? (choose all that apply)
Find The Best Health Insurance Companies Of 2022
This online survey of 2,000 Americans who have health insurance was commissioned by Forbes Advisor and conducted by market research company OnePoll, in accordance with the Market Research Society’s code of conduct. Data was collected June 29-July 1, 2022. The margin of error is +/- 2.2 points with 95% confidence. This survey was overseen by the OnePoll research team, which is a member of the MRS and has corporate membership with the American Association for Public Opinion Research (AAPOR). For a complete survey methodology, including geographic and demographic sample sizes, contact [email protected].