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Americans fail health insurance test

Despite efforts to educate consumers about how health insurance works and what's ahead with Obamacare, most Americans are confused - very confused -- according to research by LIMRA, an insurance trade organization.

LIMRA recently asked 2,000 consumers to take a 10-question quiz on health insurance, and the results were dreadful.

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About 80 percent of the test-takers flunked, answering five or fewer questions correctly, and only 10 percent got at least seven questions right. Uninsured consumers fared the worst, answering on average only three or fewer questions correctly, but insured consumers didn't do that much better.

The scores are especially grim, considering it was a true or false quiz, says Anita Potter, assistant vice president of LIMRA Insurance Research.

"They had a 50-50 chance at guessing right," she laments.

Stumped about health insurance deductibles

Consumers had the toughest time with this one: The deductible is the amount you pay out of your own pocket for health care for each visit before the insurance company or health plan pays the rest of the costs.

health insurance test Only 15 percent had the correct answer: False. The deductible does come out of your pocket, but it's the fixed amount you pay during the benefit period, usually a year, before the health plan starts to pay for covered services.

The largest portion of test-takers got this question right: A PPO (Preferred Provider Organization) is a health plan that contracts with doctors, hospitals and other health care providers to offer medical services to its members.

Sixty-nine percent of people gave the correct answer: True.

In addition to the quiz, LIMRA gave some hypothetical situations using health insurance coverage, including the dollar amounts for deductible, co-payment and coinsurance, and how those would apply for a covered medical service. Participants were asked to calculate how much their out-of-pocket costs would be. Only 25 percent came up with the right answers.

Much attention has focused on helping people enroll in health plans for 2014 when virtually everyone is required to have health insurance. U.S. Health and Human Services Secretary Kathleen Sebelius recently announced $150 million in grant awards to more than 1,000 health centers to enroll uninsured Americans in new health plans made available by the Affordable Care Act. The health centers will help consumers understand their coverage options, determine eligibility for public programs or financial assistance, and enroll.

Such enrollment efforts are good, Potter says.

"But the problem is, do they know what they're enrolling in?"

Confusion about health care reform continues

LIMRA's survey found that most consumers think the plans available through the new insurance marketplaces, formerly called exchanges, are plans operated by the government. Only 14 percent knew that the plans will be offered by private health insurers.

Potter is concerned that consumers will judge health plans by the cost of the premium alone and won't understand how the plans work. A multi-pronged approach involving government, health care providers, employers, health insurance companies and agents is needed to educate consumers, she says.

"It's imperative because they're going to have multiple choices," she says.

Uninsured Americans aren't the only ones who will have to sort through their options. Many workers now face a choice of plans offered by their employers. Enrollment in a work-based plan involves more than just clicking a box yes or no for health insurance coverage.

"Consumers themselves have to take more responsibility, too," Potter says.

More from Barbara Marquand here

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