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WellPoint, Inc. (WLP), Aetna Inc. (AET), UnitedHealth Group Inc. (UNH): Why Is Obamacare So Hard to Understand?

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If you think most Americans are confused about upcoming changes related to the Affordable Care Act, commonly referred to as Obamacare, you’re right.

A recent poll by InsuranceQuotes.com found that 85% of respondents didn’t think consumers had enough information about Obamacare. Some Americans in a May survey by health insurer WellPoint, Inc. (NYSE:WLP) thought that the Obamacare exchanges would include insurance for pets, homeowners, and cars. (They won’t.)

Recent research conducted by Carnegie Mellon University economists indicates that the confusion goes beyond just Obamacare, though. Their study concluded that many people in the U.S. don’t understand health insurance in general. Why aren’t we as informed about this important subject as we should be?

Baffling buzzwords
One key reason behind the confusion: a bevy of baffling buzzwords. Only 14% of Americans surveyed by Carnegie Mellon fully understood what deductibles, copays, coinsurance, and out-of-pocket maximums were. Even fewer could calculate how much they would have to pay for a hypothetical four-day hospital stay.

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A 2011 survey of insured adults sponsored by Aetna Inc. (NYSE:AET) found results that were better but still showed plenty of consternation. Thirty-two percent of respondents didn’t understand the total cost of their health-insurance plans. Thirty percent didn’t know the difference between preferred provider organizations, or PPOs, and health maintenance organizations, or HMOs.

Aetna Inc. (NYSE:AET) reported that 26% of adults surveyed didn’t understand which providers were in network. When referrals are needed and not needed spurred plenty of questions also, with 24% indicating trouble understanding this part of their health plan.

Combating confusion
Some companies are trying to combat the confusion about health insurance. Aetna Inc. (NYSE:AET), for example, redesigned its website to better explain its health benefits. The site even allows members to download a free copy of Navigating Your Health Benefits for Dummies.

UnitedHealth Group Inc. (NYSE:UNH) turned to social media. The big insurance company has several YouTube channels that explain health insurance options to its customers. Like Aetna Inc. (NYSE:AET), UnitedHealth Group Inc. (NYSE:UNH) also offers resources on its website to help customers, including a glossary of health insurance terms.

At least a couple of big companies are working to help Americans better understand Obamacare. Walgreen Company (NYSE:WAG) joined with the Blue Cross and Blue Shield Association, or BCBSA, in July to educate consumers about health reform. Walgreen Company (NYSE:WAG) launched a website that answers questions about Obamacare and will offer informational brochures in its stores. Exactly what actions the BCBSA, which includes 14 plans owned by WellPoint, Inc. (NYSE:WLP), would take weren’t clear.

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