Insurance terms like COB and PPO are enough to make Americans say OMG. 96% of Americans fail to correctly define 4 basic health benefit definitions. And ironically, the 4 terms—deductible, co-insurance, co-pay, and out-of-pocket maximum—all impact consumer cost.
Millennials know the least.
Americans’ health care headaches turn to migraines if we put a microscope on millennials. This group has the lowest insurance understanding—only 36% were able to define the terms mentioned above.
But what about older generations?
Though they’re the most confused age group, millennials aren’t the only generation baffled by insurance lingo. Just under half of baby boomers could correctly identify the words, even though 70% were confident they could.
One age-diverse study discovered less than one third of participants could correctly identify the features of their own plan. In another study, 71% of people couldn’t identify basic cost-sharing features of health insurance plans. This insurance illiteracy can cause consumers to make mistakes when choosing coverage—like overpaying just to get a lower deductible.
Regardless of your level of understanding, make it a priority to educate yourself about insurance. After all, the best way to take full advantage of your plan is to understand its features.