STEVE INSKEEP, HOST:
Here's one thing that will not immediately change in the new year - many people will still have trouble understanding their complicated health insurance plans. Mark Zdechlik of Minnesota Public Radio reports on a shortage of insurance literacy.
MARK ZDECHLIK, BYLINE: Solicit opinions about health insurance, and you're almost guaranteed to find consensus. It's mystifying and irritating.
DAVID TURGEON: A lot of the buzzwords are intended to just complicate the whole thing and make it more expensive.
ZDECHLIK: That's 46-year-old David Turgeon sitting in a food court in Minneapolis. Over in St. Paul, outside a grocery store, 50-year-old Seanne Thomas, a real estate broker, says she's pretty health insurance savvy. Her family members are covered under three different plans.
SEANNE THOMAS: So I had to compare co-pays, I had to compare out-of-pockets, deductibles.
ZDECHLIK: So how about a quiz?
I have a scenario for you.
ZDECHLIK: A guy goes to the doctor to get a wart removed. The bill is $530. How much is he on the hook for?
He has a co-pay of $30, he has a deductible of $100 and he has co-insurance of 20 percent.
THOMAS: Well, his deductible has to be maxed out first.
ZDECHLIK: Thomas nails the co-pay and deductible but then runs aground.
THOMAS: I don't know what you mean by the term co-insurance.
ZDECHLIK: Co-insurance, if your plan has it, kicks in after you've met your deductible and requires you to pay a set percentage of medical bills. American Institutes for Research came up with that quiz and put the question to several hundred people. Only 1 in 5 got it right. Kathryn Paez researches health insurance literacy for the organization.
KATHRYN PAEZ: People really struggle with understanding health insurance for a variety of reasons. One is just the volume of information. There's a lot to know. The other is because the language is unfamiliar to them.
ZDECHLIK: And that unfamiliarity, Paez says, is greater among African-Americans, Hispanics and people with low incomes and low levels of education. Your health insurance premium is the amount you pay every month regardless of whether you seek care. A co-payment is a fixed amount you pay every time you go to the clinic. A deductible is how much you have to pay before certain benefits kick in. The maximum out-of-pocket cost is the absolute most you would ever have to pay for care in a year. By the way, all of this so-called cost sharing could change if you go out of network.
KATHLEEN CALL: We've created a monster, and it's not surprising to me that there's literacy issues.
ZDECHLIK: That's University of Minnesota School of Public Health professor Kathleen Call. She worries confusion surrounding health insurance could keep people away from the doctor.
CALL: People are treating it more like car insurance - you don't use it until something happens. And that's not the way we want health insurance to be used.
ZDECHLIK: Call says avoiding care could threaten public health. She also says not understanding what's covered and what's not can leave people on the hook for big medical bills.
CALL: That can mean the difference between, you know, paying that medical bill or paying rent.
ZDECHLIK: Remember that quiz? We ran it by the industry group that represents health insurance companies. Clare Krusing is a spokesperson for America's Health Insurance Plans.
CLARE KRUSING: I totally understand why this is confusing and can be challenging, but the deductible itself...
ZDECHLIK: Krusing mentioned that she did not have a calculator in front of her and blamed the $100 deductible for tripping her up.
KRUSING: I just don't know of anyone that would have a $100 deductible.
ZDECHLIK: So who's to blame for all the confusion? Krusing says the industry is using increasingly complicated cost-sharing schemes to hold down the cost of monthly premiums. She also says plans are trying harder than ever to help consumers understand their policies.
KRUSING: Whether it's on mobile apps, whether it's on email reminders, whether it's, you know, videos, health plans are doing all of that.
ZDECHLIK: The industry and consumer advocates agree if something's unclear, demand clarification from the insurance company. For NPR News, I'm Mark Zdechlik in St. Paul.
INSKEEP: His story comes to us thanks to a reporting partnership with NPR, Minnesota Public Radio and Kaiser Health News.
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