Scholars pinpoint gaps in consumer knowledge of health insurance jargon
This article first appeared in the St. Louis Beacon, Oct. 21, 2013: Thinking of buying insurance through the exchange?
While you wait for programmers to fix the glitch-ridden sign-up system, grab a crib sheet and learn the terms that can help you make good decisions about coverage. Pay close attention to words like PPO, POS, deductible, co-payment, drug formulary and many more.
If you already have health insurance and are perplexed by this jargon, imagine how much more confusing the terminology is for people signing up for health insurance for the first time -- even with the assistance of navigators trained to answer questions and help people sign up.
Mary Politi has thought a lot about this issue. Her research suggests that those navigators need to do more than simplify the jargon. They need to use visuals, personal narratives and other techniques to help consumers through what she says can be a confusing process.
Politi, an assistant professor at Washington University in St. Louis, is collaborating with four other scholars on ways to help consumers to make good choices when buying insurance on the federal exchange. Other team members are Kimberly Kaphingst, Matthew Kreuter and Timothy McBride, all affiliated with Washington University, and Enbal Shacham from Saint Louis University.
The study examines how well consumers, with limited to no experience with buying insurance, are able to understand terms associated with coverage. The initial part of the study involved 51 uninsured consumers from rural, urban and suburban parts of Missouri.
Those with no experience in buying insurance had the most difficulty understanding a range of terms, including co-payment, deductible and formulary, according to the research. More terms were understood by consumers who were able to draw on their familiarity with auto insurance, the researchers found; consumers who previously had health insurance were more familiar with the terms than others in the study. Even so, participants couldn’t make distinctions between some terms, such as deductible and co-payment.
Some preliminary results of research were publicized in the spring at the Society for Behavioral Medicine. The first phase of the study will soon be published in Medical Care Research and Review, a bi-monthly journal.
Politi says limited health literacy and limited math skills mean some individuals need help “given the complex written and numerical information required to understand” and compare different insurance plans.
Her previous research has focused on decisions that patients and doctors make about care. She found that these patients also had struggled with questions of “how to decide on health insurance options, which really impacted their care.” That lack of knowledge, in turn, made her wonder how savvy patients would be in understanding choices they must make in the insurance exchange.
The team is hoping to develop better ways of communicating about health insurance so that consumers will understand their options, she says.
“We’ve developed some strategies already that we are testing in the second part of the study,” she says. “We should have results about that in the spring.”
She says the team is getting a lot of feedback from consumers and is trying to determine which strategy works best for which consumers.
The team’s approach focuses on incorporating “personal stories about people who have made decisions (about insurance options). These are hypothetical stories based on common scenarios, so people hear what others have chosen when they were in similar situations.”
Politi says income seems to be the biggest influence on consumers' choices. Earlier research involving consumers with private insurance showed that people were more concerned about choice of doctors and hospitals. “They were more interested in making sure that they could keep their same doctors,” she said.
“Our participants are mostly concerned about cost. A lot of these participants (in the study) don’t have a regular doctor, so it’s really mostly about affording care.”
She says some examples and terms explored in the team’s research were based on the health reform program in Massachusetts. The federal insurance exchange is based partly on the Massachusetts model.
“We didn’t have very many instances where people knew all of the terms,” Politi said of the study results. “Even people who have had health insurance for years are confused by a lot of the options that were not presented in a way that’s user friendly.”
Those assisting consumers in the marketplace need to do a better job in communicating information in a way that’s easily understood to help consumers “make choices that work best for them,” Politi said.
In the meantime, consumers seeking to sign up for insurance are having more success in some states than others. Federal officials acknowledge that enrollment has been slowed by software glitches, and they promise that the problems will be corrected soon.
Some people are concerned that the delays could discourage the uninsured from enrolling, while others are appealing to people to wait a week or so before trying to sign up, noting that they still have time before Dec. 15. That’s the deadline for completing the process to start getting health benefits on Jan. 1. Federal officials have yet to disclose how many people have succeeded in signing up. Critics say that’s because the number is quite low. Officials will only say some figures will be available by next month.
Some of the terminology consumers need to understand before buying insurance through the exchange. These definitions come from healthcare.gov:
Preferred Provider Organizations or PPO A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of providers. You pay less if you use providers that belong to the plan’s network. You can use doctors, hospitals and providers outside of the network but will pay more.
Point of Service or POS is a type of plan in which you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans also require a referral from your primary care doctor to see a specialist.
Co-payment is a fixed amount (for example, $15) you pay for a covered health care service, usually when you get the service. The amount can vary by the type of covered service.
Deductible is the amount you pay for covered services before your health insurance begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve spent $1,000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services.
Formulary is a list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits. Also called a drug list.
Essential health benefits are health-care service categories that must be covered by certain plans, starting in 2014. These benefits must include items and services within at least the following 10 categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
Insurance policies must cover these benefits to be certified and offered in the health insurance marketplace. States expanding their Medicaid programs must provide these benefits to people newly eligible for Medicaid.
A complete glossary of terms used in the Affordable Care Act is available online.
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