The search for the educated consumer has been going on for a long time. The ACA expands that effort, hoping that educated young people will rescue reform by flooding the market with healthier beneficiaries who would widen the risk pool while cutting back on expensive uncovered emergency department care.
Insurance is complex, though, full of words that can seem like answers to a Klingon crossword puzzle to the uninitiated.
A recent study in the Journal of Adolescent Health found that young people have a difficult time navigating the healthcare.gov website, partly because they don’t know what terms such as deductible or out of pocket mean.
Researchers at the University of Pennsylvania observed 33 individuals in Philadelphia, ages 19 to 30, as they explored the website. A follow-up interview was conducted a month after a participant was observed to find out what he or she considered to be advantages or disadvantages of having insurance and the factors they thought were important in selecting coverage.
None of the participants rated themselves as good or very good in understanding all insurance terms presented to them. Still, they overrated their knowledge.
“Confidence in understanding was poorly correlated with actual understanding,” the study states. “For example, of those who reported ‘good’ or ‘very good’ understanding for deductible and premium tax credit, 33% and 40% defined the terms incorrectly. Cost-sharing concepts particularly confused participants.”
Researchers asked the participants to think out loud as they reacted to what they saw on the website. They then interviewed the young people to ask about issues that might not have come up during the observation period.
They also asked them to define a dozen health insurance terms. In addition to deductible and out of pocket, the list included coinsurance, HMO, and—the least identified—cost-sharing reduction plan. The health care terms participants most accurately identified were monthly premium, copayment, and referral.
There was also sticker shock. “While over $100 per month was considered unaffordable by most young adults, the least expensive catastrophic plan without tax credits in Philadelphia was $187 monthly, and all participants who did not enroll in an insurance plan cited unaffordability as the main reason.”
Of the 33 participants, eight had selected a health plan on the exchange by the one-month interview; four enrolled directly with health insurance plans.