Many U.S. adults lack a basic understanding of common financial terms found in health insurance plans as they face critical decisions about their future coverage, according to an AICPA survey.
More than half of respondents (51%) could not accurately identify at least one of the following terms: premium, deductible, and copay, according to a telephone survey of 1,008 U.S. adults by Harris Interactive. These terms are commonly used in health insurance plans.
The Patient Protection and Affordable Care Act, P.L. 111-148, which was passed in 2010, requires individuals to purchase health insurance or pay a penalty beginning in 2014. Although open enrollment begins in October, the survey found that knowledge of the health care law and its implications are limited.
Forty-one percent of respondents said they are not at all knowledgeable about the law, and another 48% said they are somewhat knowledgeable.
“Half of Americans would fail health insurance 101,” Ernie Almonte, CPA, chair of the AICPA’s National CPA Financial Literacy Commission, said in a news release. “That’s critical insight as consumers prepare to make important decisions with implications for both their health and fiscal well-being. Americans need to take time in the coming weeks to familiarize themselves with the key terms and assess their needs so they make the best decisions for their health and financial situations.”
Fourteen percent of those surveyed said they do not have health insurance; half of those respondents said figuring out how to pay for health insurance is their biggest concern about the mandate. The requirement to purchase health insurance is the biggest financial concern for 11% of survey respondents.
Tips on evaluating and choosing health insurance are available at the AICPA’s financial education site.
—Ken Tysiac (firstname.lastname@example.org) is a JofA senior editor.