About one-fourth of consumers would rather file their taxes than go through the ordeal of selecting a health insurance plan, according to a recent UnitedHealthcaresurvey.
About 28 percent would rather get a teeth cleaning.
But this month, many Americans will have no choice but to begin the often-reviled exercise of choosing insurance for next year — a task made particularly painful by rising prices and, in some cases, fewer choices. According to several recent surveys, yet another reason may be behind consumers’ anxiety when it comes to choosing coverage: They don’t understand it.
Only 3 percent of more than 200 Chicago-area residents could correctly define four basic health insurance terms, according to a recent survey by online broker PolicyGenius and Radius Global Market Research.
For those who get insurance through their employers, open enrollment often begins in November. Medicare open enrollment runs from Oct. 15 to Dec. 7. Today is also the start of open enrollment for those who purchase health insurance through the Obamacareexchange.
PolicyGenius found that, across the country, Americans think they understand health insurance more than they actually do. In Chicago, an average of 69 percent of those surveyed said they understood at least one of four terms: deductible, copay, out-of-pocket maximum and coinsurance.
But when put to the test, only 41 percent on average actually understood at least one of those terms. Only 3 percent understood all four.
That makes Chicago the third most confident metropolitan area — and the third least knowledgeable — among 10 metropolitan areas included in the survey.
For the record, a deductible is the amount consumers must generally pay for health care before insurance starts paying. A copay is a fixed amount that consumers must pay for services under the terms of their plan. An out-of-pocket maximum is the most a consumer will pay for health care in a given year before insurance starts covering the full cost. Coinsurance is typically a percentage consumers pay toward health care costs before meeting their out-of-pocket maxes.
Part of the reason for the knowledge gap is that people don’t devote much time to choosing insurance each year, said Jennifer Fitzgerald, PolicyGenius CEO and co-founder. More than half of workers spend 30 minutes or less each year trying to understand and signing up for health insurance, according to insurer Aflac’s 2015 open enrollment survey.
“It’s a very tedious and overwhelming task,” Fitzgerald said. “Like any tedious and overwhelming task, people tend to push it off. They tend to default to what they did last year.”
But choosing a plan without understanding it can ultimately create more headaches, and lead to unexpected costs, down the road, Fitzgerald said.
“Without knowing the basic terms people are challenged to make the right decision for them,” said Colleen Van Ham, president and CEO of UnitedHealthcare of Illinois. It’s not enough to look at a plan’s premiums. “They need to look at the full picture in terms of what their health care needs are and what the total out-of-pocket costs could be in order to understand what they might spend in a year.”
Many insurers offer online tools designed to help consumers understand how to pick plans such as UnitedHealthcare’s Health Care ABCs website, which includes tips and definitions. Fitzgerald also recommends consumers check out insurers’ summaries of benefits and coverage — documents that run about 10 pages that insurers post online explaining their plans.
Those buying insurance on the exchange can get free in-person help.
Another factor that consumers must grapple with when selecting health insurance policies is cost.
Illinois consumers who shop for insurance on the exchange are finding higher prices and fewer choices this year. Costs for employer-based insurance are also rising, though more modestly. The total cost to employers and employees for health insurance premiums this year was up 2.4 percent, one of the lowest increases in decades, according to a recent survey by Mercer, a human resources consulting firm.
More workers also are finding themselves on high-deductible plans. This year, 29 percent of employees were in high-deductible plans, which often require consumers to pay thousands of dollars toward their health care costs before insurance will cover many services, according to Mercer.
Those costs, along with a jumble of terms, percentages and numbers, lead to confusion for many as they examine their options each November, experts say.
Jonathan Jackson, who works in university services for Northwestern University, said it can be a lot of pressure to choose the right plan for his family each year. Jackson, 31, gets insurance through his employer, and, like many people, said he probably spends about a half hour a year choosing coverage.
“It’s a little complicated sometimes,” Jackson said, “just making sure you pick the right plan.”