Individual Health Insurance Plans Still Cause Confusion

Terminology associated with health benefits leave some segments of the population confused.

A new report revealed that individual health insurance plans have left many Texans confused.

From 2013 to 2015, a percentage of Texans who bought individual health insurance increased 78%. This increase included 1.3 million Texans who purchased Affordable Care Act marketplace plans.

Those who bought individual plans were far less likely to understand basic health insurance terms, including premium, copayment, and deductible.

Although 25% of Texans with employee-sponsored health insurance said they lacked confidence in understanding the term “maximum out-of-pocket expenses,” more than 42% of people with individual health insurance plans didn’t understand the term either.

“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,” said President and CEO of Episcopal Health Foundation, Elena Marks. “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.”

Additionally, 51% of individual health plan buyers reported a lack of confidence in understanding the amount of money that goes to healthcare providers outside of their plan’s network. Furthermore, 46% said they didn’t understand what counts as preventive services.

“The long-term success of the Affordable Care Act depends on people buying, using and experiencing satisfaction with health insurance,” said Vivian Ho, chair in health economics at the Baker Institute. “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.”

Texans with Medicare, Medicaid, military and employee-sponsored health insurance found basic health insurance terms difficult to understand, but their lack of confidence rates were about one-third lower than Texans with individual health insurance plans.

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