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Do You Speak Health Insurance? It’s Not Easy.

Solicit opinions about health insurance and you’re almost guaranteed to find consensus: It’s mystifying and irritating.

“It just seems like a lot of the buzzwords are intended to just complicate the whole thing and make it more expensive,” said David Turgeon, 46.

Health-plan enrollment season rolls on, and people shopping on and the other marketplaces have until Jan. 31 to pick a plan.

But even people trying to pick from their employers’ options can find the process complicated and difficult to understand. The jargon can be overwhelming, and it can lead people to make to costly mistakes or avoid care all together.

Ronen Ben-Simon, 28, said some basic health insurance terms are lost on him — even though he’s a nurse. “I don’t even know what ‘coinsurance’ is, to be honest,” he said.

“Coinsurance,” if your plan has it, kicks in after you’ve met your deductible and requires you to pay a set percentage of medical bills.

Seanne Thomas, a 50-year-old real estate broker, said she’s gotten good at figuring out how health insurance policies work. She’s had to, because her family members are covered under three different plans. “So I had to compare copays, I had to compare out-of-pocket, you know, deductible and maximum coverage and …”

With all that grappling with insurance plans she’s done, Thomas was game for a quiz. Here’s a scenario, developed by American Institutes for Research:

A guy goes to the doctor to get a wart removed. The bill is $530. He has a copay of $30, a deductible of $100 and coinsurance of 20 percent. How much is he on the hook for?

Seanne Thomas manages three health insurance plans for her family members.

Seanne Thomas manages three health insurance plans for her family members. (Mark Zdechlik/Minnesota Public Radio)

Thomas nailed the copay and deductible, but then ran aground at “coinsurance.”

Most people would be in the same position. A couple of years ago, American Institutes for Research, which is a social science research firm, asked hundreds of people and found that only 1 in 5 got the right answer, which is $210.*

Even Clare Krusing, spokesperson with America’s Health Insurance Plans, had trouble with the equation and said she wished she had a calculator. Ultimately, she blamed that low deductible for getting between her and the right answer.

“I just don’t know of anyone that would have a $100 deductible to be totally honest with you,” Krusing said.

Krusing says the cost-sharing schemes are complicated, but they help hold down the cost of monthly premiums.

“People really struggle with understanding health insurance for a variety of reasons,” said Kathryn Paez, who researches health insurance literacy for American Institutes for Research. “One is just the volume of information. There’s a lot to know. The other is because the language is unfamiliar to them, and they don’t really understand health insurance terms and concepts.”

And that unfamiliarity, Paez said, is greater among African-Americans, Hispanics and people with low incomes and low levels of education. But even highly educated people can struggle.

“We’ve created a monster, and it’s not surprising to me that there’s literacy issues,” said Kathleen Call, a professor in the University of Minnesota’s School of Public Health. “I’ve studied this stuff, and sometimes I make mistakes.”

Call has grown increasingly concerned that the complexity of insurance could compromise public health.

Professor Kathleen Call with the Minnesota School of Public Health. (Mark Zdechlik/Minnesota Public Radio)

Professor Kathleen Call of the University of Minnesota’s School of Public Health worries that complex insurance could compromise public health. (Mark Zdechlik/Minnesota Public Radio)

“People are treating it more like car insurance: You don’t use it until something happens,” she said. “You have an accident, then you use it. Otherwise you’re trying not to use it. And that’s not the way we want health insurance to be used.”

Call said people are leery because a lot of money is at stake and an uninformed choice can be financially devastating.

“That mistake can mean the difference between … paying that medical bill or paying rent,” she said.

Surveys confirm that growing numbers of Americans avoid care because of the cost.

Krusing of AHIP says plans are trying harder than ever to help consumers understand their policies: “Whether it’s on mobile apps, whether it’s on email reminders, whether it’s easy-to-understand videos — health plans are doing all of that.”

The industry and consumer advocates agree: If something’s unclear, you should demand clarification from the insurance company.

*For those playing along at home, here’s how we get that answer: $30 copay + $100 deductible + $80 coinsurance = $210. (The coinsurance is 20% of $400, the balance after copay and deductible.)

This story is part of a reporting partnership that includes Minnesota Public Radio, NPR and Kaiser Health News.

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