Survey of Consumer Health Insurance Literacy Reveals Less Than Half of Americans Understand How Their Plan Works

PolicyGenius/Radius Research Study Indicates Biggest Open Enrollment Season to Date with More than 14 Million Shoppers Expected

PolicyGenius Health Insurance Literacy Survey reveals 2017 open enrollment shoppers are overconfident in health insurance knowledge and under prepared to select a new plan.

NEW YORK--()--PolicyGenius, a multi-product digital insurance platform, recently surveyed more than 2,000 nationwide health insurance consumers in partnership with Radius Research. The survey uncovered the health insurance literacy levels of consumers who are shopping for health insurance during the 2017 open enrollment season, including their overall confidence level and understanding of insurance terminology and plans. The survey found a 25% gap between consumers’ perceived and actual knowledge of these key health insurance terms: “deductible”, “co-pay”, “coinsurance” and “out-of-pocket maximum.”

To address this health insurance literacy problem, and help consumers apply that knowledge in their coverage decisions, PolicyGenius is launching its new health insurance app. The app educates consumers through their shopping journey and helps them weigh benefit options and priorities - by offering a transparent look at the trade-offs inherent in every health insurance policy.

The PolicyGenius health insurance literacy survey asked respondents to rate their personal level of “confidence” (how well they thought they understood the important health insurance terms), as well as their “comprehension” (their actual understanding of these terms). The findings showed that women were more aware of their actual understanding than men, with a 22% gap between women’s self-rated confidence in their knowledge of insurance terms and their actual comprehension, compared with a 29% gap for men. Millennials (age 25-34 consumers) had the lowest overall comprehension of health insurance terms and were least aware of their lack of understanding, showing a 29% gap between their confidence and comprehension. The least understood health insurance term was “coinsurance” with only 22% of consumers able to correctly define it, compared to 42% who correctly defined “out-of-pocket maximum,” 50% who understood the meaning of “deductible” and 52% for “co-pay.”

The PolicyGenius health insurance literacy survey also showed that 72% of those with non-employer-provided health insurance policies plan to shop on the open marketplace for coverage this year. Based on the Kaiser Family Foundation’s estimates of individually insured Americans, this would equate to more than 14 million health insurance shoppers on the ACA marketplaces for 2017.

“Due to a decrease of insurers available on the ACA marketplaces this year and an average 10% increase in premiums, consumers will be hard-pressed to find the best policy for their money,” said Jennifer Fitzgerald, CEO and Co-Founder of PolicyGenius. “For consumers, finding a good health insurance plan starts with understanding the various trade-offs involved with different types of plans and benefits. Americans will need to weigh competing priorities, understand the apples-to-apples difference between plans, and understand how decisions may impact their total out-of-pocket costs. The health insurance app we’re launching today helps them do all of this. It simplifies the shopping process by cutting through the insurance jargon and helping consumers prioritize must-haves and nice-to-haves to find the best plan for their needs.”

PolicyGenius, which launched in 2014 to provide consumers with direct access to life, long-term disability, renters and pet insurance with a highly accurate quoting engine that offers side-by-side comparisons of tailored policies and unbiased decision support, is excited to add health insurance to its platform today. The PolicyGenius health insurance app will offer consumers access to both on-exchange and off-exchange health insurance plans, supported with plain English explanations of benefits, transparent shopping options and smart decisioning tools.

The PolicyGenius health insurance literacy survey also indicated:

  • Most insured Americans are satisfied with their current plan, at 70% of total respondents.
    • People who used their health insurance 2-3 times in the past year are 12% more likely to be satisfied with their plan than those who used it just once.
    • Millennials are most likely to be satisfied with their health insurance plan, at 77%.
    • There is no variation in plan satisfaction between those who have individual insurance versus employer-provided insurance.
  • More than half of respondents aren’t very confident in their ability to choose the best health insurance plan for their needs.
    • Only one-third of women overall are “very confident” in their ability to choose the best health insurance plan for their needs.
    • The two groups that showed the highest confidence in their ability to choose the best plan were men at 58% and millennials at 43%.
    • The survey found higher confidence levels in men over women (12% difference) and younger vs older respondents (millennials were most confident at 43%, 10% more than ages 45-55) in their ability to choose the best plan.

The study of 2,022 respondents was conducted online from September 30 to October 6, 2016 and focused on ten U.S. markets to evaluate consumer knowledge about health insurance. Participants were the sole or collaborative decision maker of their health insurance decisions and have used their policy within the last year. All results were weighted to reflect actual population counts within each market by gender and age.

About PolicyGenius

PolicyGenius, based in NYC, was founded in 2014 by two former McKinsey consultants who saw a gap in the insurance industry and dedicated themselves to shifting the industry online and into the hands of the consumer. Through its highly tailored Insurance Checkup™, users can discover their coverage gaps and review solutions for their exact needs. The company provides the only place online to shop for health, life, long-term disability, renters and pet insurance through its highly accurate quoting engines that offer side-by-side comparisons of tailored policies.

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Andrea Collins
VP of PR and Communications


Andrea Collins
VP of PR and Communications