Study Shows Concerns with Consumers Health Insurance IQ

As concerns abound about the H1N1 virus and the ongoing national debate over the future of health care, a recent study from the National Association of Insurance Commissioners (NAIC) paints a concerning picture.

The NAIC's latest Insurance IQ survey reports that consumers are unaware of some important aspects of their health insurance coverage that can have a major impact on their wallets.

In the survey of 1,000 consumers conducted in October, only six in 10 consumers (61%) understand their rights to appeal a denied health insurance claim and less than one in three consumers has a firm grasp of the cost factors that decide their health insurance premiums. Additionally, a strong minority of consumers (19%) also admit they may go to an out-of-network doctor for health care coverage.

"In this economic environment, consumers need to understand all of the factors that impact the cost of their health insurance," said NAIC President and New Hampshire Insurance Commissioner Roger Sevigny. "By getting smart about their policies and tapping into the resources available, consumers will be more confident about their insurance choices and learn to make cost-effective decisions without sacrificing important coverage needs."

Improving Your Health Insurance IQ

These ideas can help you better grasp your health insurance needs and requirements so you can better protect your loved ones and yourself.

• Conduct a Coverage Checkup: By getting smart about your health insurance coverage, you can more easily understand the cost implications of various procedures and services. For example, going to an out-of-network doctor versus in-network traditionally will cost a you much more for the same type of service. Do your homework, research all the options available and review your insurance policy before making any decisions.
• Take Advantage of Your Open-Enrollment Period: Open Enrollment refers to the time period when members of a group health insurance plan can enroll in or change certain programs and benefits. During this period, insurance carriers are required to accept all applicants of the group without underwriting or evidence of insurability. It is also a good time to review your coverages, deductibles and provider or prescription drug lists. Generally, open enrollment occurs just once a year and, if you miss that time, you likely will not be able to enroll in your employer-sponsored health insurance program or make changes to your options until the following year. Check with your human resources department to see when your company's open enrollment period begins and ends, and when your policy goes into effect.
• Contact Your State Insurance Department: Every state has an insurance department ready to help with any question or complaint you may have about coverage. With many health insurance policy details developed and managed at the state level, you should reach out to your state insurance commissioner to learn more about how your local laws affect their coverage. To find out more, contact your state insurance department by visitingwww.naic.org/state_web_map.htm
• State Consumer Protections: State law provides a variety of important protections through state law. These may include the appeal of denial of coverage decisions within the insurance company or to an impartial external reviewer; prompt payment of claims; access to certain specialists and health care providers; and coverage of specific treatments and services.
• Insurance Premiums: States vary in the methods they permit for calculating premiums. The ranges of premium rates an insurer can charge are typically set by state law. However, in other states, a method called "community rating" helps determine premiums, where everyone in a specific geographic area pays the same rates for health insurance.
• Create a Rainy Day Fund: It is crucial that you put aside savings into a rainy day fund to cover any expenses in case an emergency happens. One way to do that is with a Flexible Spending Account (FSA). Health insurance policies do not always pay for such procedures as allergy tests or braces, but an FSA can help save on these out-of-pocket costs by allowing you to set aside pre-tax dollars for uninsured medical expenses and child care. Ask your human resources department about your employer's FSA and what types of expenses can be reimbursed through the program. Be aware, however, that any unused money in an FSA does not roll over to the next year, so try to estimate your costs carefully at the beginning of the year.

Survey Methodology

The NAIC conducted the Health Insurance IQ study Oct. 21-26. The participant sample included a nationally representative sample of 1,000 American adults ages 18 and older with a margin of error +/- 3.1 percent in 95 out of 100 cases.