Health Insurance

The Coronavirus Is Showing How Little Americans Know About Their Health Insurance

The Coronavirus Is Showing How Little Americans Know About Their Health Insurance

As the coronavirus pandemic spreads throughout the United States and the world, Americans must navigate the complexities of the health care system. This is especially difficult as tens of millions of Americans are newly unemployed — and for many, newly without their employer-sponsored health insurance as a result.
Checking blood pressure while wearing a mask
Checking blood pressure while wearing a mask Source: Getty Images

ValuePenguin surveyed more than 1,000 Americans to understand what they know and how they feel about the state of health insurance in 2020 America. We also checked in with experts to see how their answers stacked up.

Key findings:

1. 68% of Americans said they're worried the coronavirus will impact health care costs. While it's unknown how the virus will impact premiums in 2021, health care experts predict the crisis will extend into next year and that health care usage in general will continue to decline.

2. We found a high level of confusion about what the CARES Act does. Only 5% of Americans understand that it funds COVID-19 testing but not treatment.

3. About 38% of people said that knowing what is covered by health insurance is the most confusing part of coverage. Fortunately, COVID-19 treatment is typically covered by health insurance, including Medicare — though normal cost-sharing rules apply.

4. Overall, Americans tend to be unsure about their health insurance, and that could have a major impact on their finances.

The complexity of the American health care system has led to widespread confusion about how health insurance works and what happens if consumers contract the coronavirus

The $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27. While it provides direct financial relief for many, with cash payments up to $1,200 per adult, the medical benefits offered are much less significant.

Only 5% of people correctly answered that the CARES Act doesn't pay for treatment for COVID-19; the bill only covers the cost of COVID-19 testing.

Our survey found that the vast majority of Americans didn't understand what's included in the medical provisions of the CARES Act. A full 59% of respondents incorrectly said the law included medical treatment for at least some people, and 36% said they didn't know.

"While testing is a crucial element to managing the coronavirus epidemic, knowing you've contracted the virus is only part of the solution for those infected. Getting treatment is just as important and can be a financial challenge for people without health insurance," says Sterling Price, health insurance analyst at ValuePenguin.

"People who erroneously think they will get free treatment through the CARES Act may be surprised by a big bill after a trip to the emergency room, or even to an urgent care clinic."

Approximately half of Americans receive health insurance through their employers. With more than 38 million Americans out of work, the Kaiser Family Foundation estimates nearly 27 million people (including family members) are newly without insurance.

If you've lost insurance from your employer, you can usually enroll in COBRA coverage or a plan through your state's health insurance marketplace. However, you may be on the hook for a higher premium because employers typically cover a large portion of this cost. Also, keep in mind that navigating the process of buying a marketplace plan can be challenging, as there are often dozens of options to choose from.

Understanding what's covered and how to choose the right plan are the most common points of confusion involving health insurance

Survey respondents singled out what is and is not covered by insurance as the most confusing aspect of health insurance — 38% said so. And 28% felt that choosing the right plan for your needs was the most confusing.

Here's some good news for people selecting a new health insurance plan with the coronavirus in mind: The vast majority of health insurance plans include both testing and treatment for COVID-19. But for the 5.7 million people who have lost insurance and aren't eligible for subsidies, they're on the hook for the full premium amount going forward.

In addition to these pain points, our survey illuminated a troubling misconception about making changes to a health insurance plan once enrolled. Just over half of respondents (53%) didn't know policyholders are only allowed to make changes once a year: 35% thought you could make changes at any time, and 18% didn't know.

What's included as a qualifying life event? There are many types of qualifying life events. Here are the most common ones:
  • Starting or ending a job
  • Giving birth or adopting a child
  • Getting married or divorced
  • Death in the family
  • Moving to a new state

In most cases, you're only able to make changes to your health insurance plan once a year: during open enrollment, which usually happens in November and December. Whatever you choose, you're stuck with it for a calendar year — even if you choose "no insurance." You can't make changes just because you've fallen seriously ill or decide you want a more generous plan.

The only exception is if you experience a "qualifying life event," such as getting married, having a child, or starting or leaving a job. You'll usually have a limited period of time to make changes to your insurance or choose a new plan altogether.


As the coronavirus pandemic spreads, Americans worry premiums could rise

Most Americans believe that health insurance costs will go up as a result of the coronavirus pandemic: 55% of survey respondents predict premiums will increase.

Experts say it's difficult to know for sure, but there's a possibility premiums will rise. The main factor is to what degree the pandemic is under control by November, when insurers set rates for next year. "If coronavirus is still present, individuals can expect slightly higher health insurance premiums, since the insurance companies will include this in their risk calculations when deciding premiums for 2021," Price says.

Costs will go up if the coronavirus pandemic extends into 2021, but increased use of telehealth could mitigate the effects.

On the other hand, Colleen Corrigan, a life and health insurance agent with Wallace & Turner insurance in Springfield, Ohio, notes that "telehealth usage is the predominant delivery [method] of care for many primary care physicians and mental health counselors during the pandemic, and it will be interesting to see if this platform of care continues."

If telehealth continues to grow in popularity, it could lead to lower costs for some types of care — especially as the infrastructure improves for remote doctor visits.

Another key issue is how medical usage overall may change as a result of the coronavirus. "Hospital and surgery center usage has shrunk. The loss of income has created a level of financial instability" for medical centers, Corrigan says. Americans are hoping health insurance costs don't increase too much for 2021. About 34% of survey respondents noted this as their top complaint.


Quality and availability of care continue to be key issues for Americans as 2020 election looms

The American health care system was a key topic for the 2020 presidential election even before the pandemic began. But access to health care has become an even more sensitive issue in recent months, as millions have either lost access to their insurance, required some of the most serious medical care of their lives or both.

We found that 72% of consumers think health insurance should be mandatory for all Americans, but people are split on who should bear the cost of mandatory coverage. About 37% only believe in mandated coverage if that coverage comes at no cost to the individual, while 36% think it should be mandatory regardless of whether coverage comes at a personal expense.

Some are proponents of "Medicare for All," in which the government would pay for health care for every American. Policyholders would not have copays, monthly premiums or other cost-sharing obligations.

However, we found that Americans tend to be apprehensive about the quality of government-sponsored health care. Nearly half of Americans don't think government-sponsored health insurance options, such as Medicaid, Medicare or plans subsidized through Affordable Care Act (ACA) marketplaces, offer the same quality as private plans.

That said, it's worth noting that 19% actually think government-sponsored health insurance offers better quality than private options.

Respondents may not know that these plans are often very similar to or the same as ones sold by private insurers. For example, New York's Medicaid and Medicare plans are managed by UnitedHealthcare (UHC) and use the UHC network of care.

However, as Sterling Price notes, "Medicaid and Medicare have a reimbursement rate that is lower than that of private health insurance, so some primary care physicians or doctors will choose not to accept Medicaid or Medicare patients." If you're switching from an employer-sponsored plan to Medicare or Medicaid, there's a chance your doctor may not take your new plan.

Tips from the experts: How to manage your health care during the coronavirus pandemic

Whether you're newly without health insurance coverage after being furloughed or laid off, or just concerned about the possibility of forthcoming medical bills, you can take steps to stay financially protected during the coronavirus pandemic.

Double-check your coverage, and budget for possible extra costs. It's important to understand what your health insurance covers — and plan accordingly. For example, if your deductible is $2,000, then put that amount in a savings account. This will help cover the costs of medical care you receive.

Make an informed choice when choosing a new health insurance plan. Choosing a new health insurance plan has lots of difficult trade-offs, especially if it's your first time selecting from the dozens of options from your state marketplace. Our health insurance exchange guide covers how to select the best option when managing costs, coverage options and availability.

Take advantage of qualifying life events to reevaluate your health insurance, even if you haven't lost coverage. Outside of open enrollment, you usually can't make changes to your insurance — unless you've experienced a qualifying life event. In these cases, it's an opportunity to reevaluate your health insurance needs and make any changes.

Review medical bills and explanations of benefits (EOBs) when you receive them. Doctors and medical administrators are human, and they may make mistakes when billing you for an appointment. According to a survey, 37% of Americans have found an error in their medical bills. Always double-check your bills to be sure you're not paying for care you didn't receive — and that you're not overbilled for the care you did receive.

Methodology

ValuePenguin commissioned Qualtrics to conduct an online survey of 1,136 Americans, with the sample base proportioned to represent the overall population. The survey was fielded May 5-8, 2020.