insurance

5 essential facts about health insurance

What you must know about health insurance
What you must know about health insurance © Kzenon/Shutterstock.com

Could you explain what a health insurance premium is? What about coinsurance?

Just under half of Americans with health insurance feel confident that they understand such basic insurance terms, according to a recent study in the journal Health Affairs. Among uninsured Americans, fewer than a quarter have that confidence.

As the Affordable Care Act creates millions of new health insurance customers and provides new options for the already-insured, confusion about basic insurance concepts could make it difficult for people to make the right choices.

"The vast majority of consumers do not know the ins and outs of health insurance because they never have needed to," says Eric Stauffer, a former insurance agent who now rates and reviews insurance companies online.

"For years, most people have received health insurance through their employers. They get a card in the mail, and that is their ticket to health insurance," he says. "Consumers rarely saw much more than a bill for a few hundred dollars here and there."

But it's no longer so simple. "Years of being naive about the entire industry are starting to catch up with people now," Stauffer says.

Here are five things a wise health insurance consumer needs to know.

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