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'Dismal' Understanding of Health Plans Among Consumers

Margaret Dick Tocknell, for HealthLeaders Media, August 21, 2013

Study Results
The results were "dismal," says George Loewenstein, PhD, a professor of economics and philosophy at CMU, and the lead researcher on the study. Only 14% of respondents understood basic, everyday insurance terms such as coinsurance, copayments, deductibles, and out-of-pocket payments.

Only 11% were able to calculate their share of a hospital bill. In the interest of full disclosure, however, I have to admit that question stumped me, too

By the way, the respondents were between the ages of 25 and 64, had private health insurance, and were the decision makers about their medical care. So they had some basic knowledge of the system.

Behavioral economists at the University of Pennsylvania, Stanford, Harvard, and Yale universities and the University of Chicago, as well as professionals at a health insurance company also participated in the research.

Disastrous Decisions
The findings confirm Loewenstein's worse fears that few people actually understand even the basic fundamentals of the medical insurance programs they pay for each month. "Insurance plans incorporate all sorts of incentives designed to encourage customers to make specific types of decisions. What is the likelihood [consumers] will respond to these incentives if they can't understand the most basic elements of plan design?"

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1 comments on "'Dismal' Understanding of Health Plans Among Consumers"


Harvey (8/22/2013 at 8:04 AM)
Co-payments is not a complex term. The industry claims it is so confusing due to "incentives". I don't believe that ten years ago there was any more consumer knowledge about health insurance terminology. Carriers always made their offering plans confusing. It is much easier to deny services if you cannot understand what your buying