Thursday, December 26, 2013

Health Insurance Literacy Low Among Medicaid and Exchange Populations

Public Understanding of Basic Health Insurance Concepts on the Eve of Health Reform

Linda J. Blumberg, Sharon K. Long, Genevieve M. Kenney, and Dana Goin

A central objective of the Affordable Care Act (ACA) is to reduce the number of Americans without health insurance. Providing the opportunity to purchase private insurance through the new health insurance Marketplaces (also called Exchanges) is one of the major ways in which this goal is to be achieved.

The people most likely to enroll in Marketplace-based coverage—those the ACA Marketplaces are specifically designed to help—are nonelderly adults with incomes above the national Medicaid-eligibility cutoff (138 percent of the federal poverty level, or FPL) who are currently uninsured or are purchasing individual coverage. Many qualify for Marketplace subsidies because they are not eligible to buy health insurance through an employer or other group coverage or because their available employer-sponsored coverage is unaffordable.

The new Marketplaces will offer a multitude of choices with differing costs and benefits, although all will include coverage within ACA-defined categories of essential health benefits. This brief focuses on how well the target population understands the concepts they will confront as they make their insurance choices.

Plenty of information will be available to them. States and the federal government will be providing a great deal of information on the multiple options available through the Marketplaces. Insurance agents, brokers, navigators, in-person assistors, and call center personnel will also be deeply involved in providing support to potential consumers. But insurance is a complex product, particularly for those without prior experience purchasing coverage. If consumers do not understand basic insurance concepts, they will find it hard to make the choices that best suit themselves and their families.

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