Health & Medicine

Decoding premiums, co-insurance, co-pays and deductibles has some people reeling

As soon as Deb Emerson, a former high school teacher from Oroville, bought a health plan in January through the state’s insurance exchange, she felt overwhelmed.

She couldn’t figure out what was covered and what wasn’t. Why weren’t her anti-depressant medications included? Why did she have to pay $60 to see a doctor? The insurance jargon – deductible, co-pay, premium, co-insurance – was like a foreign language. What did it mean?

“I have an education and I am not understanding this,” said Emerson, 50. “I wonder about people who don’t have an education – how baffling this must be for them.”

Health officials have spent much of the past year promoting the Affordable Care Act and enrolling people in coverage. Now they need to help consumers understand the basics of health insurance and how to use their policies, health care providers and researchers say.

“Giving somebody an insurance card and not really telling them what that insurance is going to do for them is not going to produce the health outcomes that we all want to see,” said Brendan Saloner, a postdoctoral researcher at the University of Pennsylvania. “If the goal is to improve health and lower costs … it is really important to equip consumers with the education they need.”

Patients who don’t grasp fundamental health and insurance concepts are less likely to make smart decisions about when and where to seek care, experts said. In fact, people with low “health literacy,” as experts put it, are more likely to be hospitalized and use costly emergency rooms, according to the Institute of Medicine.

It’s a big problem. About one in 10 people in the U.S. have a proficient level of health literacy, according to an assessment by the U.S. Department of Education – that is, they could understand and use health-related information in daily activities.

Researchers at the USC Schaeffer Center for Health Policy & Economics determined that just weeks before open enrollment began last year for state and federal insurance exchanges, more than 40 percent of Americans couldn’t explain a deductible – the amount patients owe for health services before insurance kicks in. The authors found that those likely to benefit most from the health law – uninsured and low-income Americans – had the least awareness.

“These are going to be more important issues in California than in other states,” said Silvia Helena Barcellos, an economist and lead author of the USC study. “Here, you have more uninsured to cover.”

Before open enrollment began, roughly 7 million Californians were uninsured – the greatest number of any state – and nearly 60 percent were Latino. “These are exactly the populations … that are the least knowledgeable,” she said, because of their inexperience with the system.

Since October, about 1.4 million people, including more than 305,000 Latinos, have bought insurance plans through Covered California. Another 1.9 million Californians have enrolled in or been deemed eligible for Medi-Cal.

Insurance is often perplexing even to savvy consumers. Acronyms abound: HMOs, PPOs, ACOs. Letters arrive in the mail saying “this is not a bill” yet appear to be just that. Some detail exorbitant prices that have nothing to do with what is actually owed.

Language and cultural barriers add to the confusion. “It’s hard to understand even if it is Spanish,” said Marisela Sanchez, 60, a new Medi-Cal enrollee from Los Angeles who has diabetes, high blood pressure and high cholesterol. “If it’s in English, it’s worse.”

Community health centers throughout the nation are seeing some of the problems firsthand.

At Eisner Pediatric & Family Medical Center in downtown Los Angeles, lead enrollment specialist Martha Vasquez said the vast majority of patients who bought private insurance selected plans with the lowest premiums, not necessarily grasping that those plans came with high deductibles.

Now they are asking why the visits that they consider preventive aren’t free and whether hospital visits are included in their plans. They also are uncertain what specialists they can see and what medications are covered.

Jessie Yuan, a physician at the center, said patients have been confused about health insurance for a long time. The new health law “just adds another layer on top of that,” she said.

Yuan said she sees it as part of her job to give a brief orientation to new Medi-Cal patients. On a recent morning, she spoke with Oscar Gonzalez, a diabetic patient from Huntington Park, in Spanish. Gonzalez had been switched to Medi-Cal from a free county program for the uninsured.

With Medi-Cal, Yuan told her patient, over-the-counter medications like Tylenol and cough syrup aren’t free anymore. He can get a free vision appointment but will have to pay for glasses. It will be easier to get referrals to specialists, but if he needs to change the appointment, he has to do it himself.

Gonzalez seemed bewildered.

He didn't even know he had been automatically switched to the Medi-Cal program until Yuan told him. “I knew by the news they were making some changes,” he said. “But I don’t know all the rules.”

The side effects of confusion can be harmful, providers said. Sanchez, the new Medi-Cal recipient from Los Angeles with several chronic conditions, stopped taking two of her regular medications because the doctor didn’t write new prescriptions. Sanchez concluded she didn’t need them anymore – not realizing that she was supposed to get refills.

To address these problems, efforts are underway across the nation by the government agencies, universities and health plans to help people understand the language of health insurance, what services are covered and how to make the best use of policies.

Health insurance exchanges are publishing glossaries of insurance terms. Insurers are holding webinars, sending out welcome kits and trying to make everything “clear, simple and easy to use,” said Susan Pisano, spokeswoman for America’s Health Insurance Plans. Pisano added that patients will take better care of themselves if they understand their benefits.

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