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

A few weeks after the Walgreen Company (NYSE:WAG)/BCBSA announcement, CVS Caremark Corporation (NYSE:CVS) said that it, too, will help educate consumers about Obamacare. CVS Caremark Corporation (NYSE:CVS) reported plans to hold “retail events” and include brochure displays in its 7,400-plus retail stores and 650 MinuteClinic locations, as well as make information available online.

A simple solution?
All of this education could be beneficial, but the bottom line is that health insurance is complicated. Obamacare is complicated. Making something complicated sound simple isn’t easy.

Attempts to make purchasing insurance online straightforward in Massachusetts, whose health insurance plan served as a model for Obamacare, didn’t pan out too well. Even with a concerted effort to streamline the website to make the process as painless as possible for online buyers, more than 40% of those who used Massachusetts online exchange found it difficult to comprehend. Around 20% were overwhelmed by the available choices.

What’s the best answer to overcoming Americans’ ignorance about health insurance? Dr. George Loewenstein, the lead research on the aforementioned Carnegie Mellon study, says a better approach would be to “simplify the underlying product”.

The Carnegie Mellon team found solid evidence that consumers would better understand a simpler health plan compared to current health plans. On the other hand, the evidence wasn’t as strong that simpler plans would attract customers or result in their changing health-care choices.

My guess is that simpler plans would be winners in the marketplace. As of now, insurance companies aren’t exactly going overboard in offering less complex plans, partly because of continued anxiety over the impact of Obamacare. If one does step up to the plate in an innovative way, though, I suspect customers — and investors — will reward that company for keeping it simple.

The article Why Is Obamacare So Hard to Understand? originally appeared on Fool.com and is written by Keith Speights.

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group and WellPoint and owns shares of WellPoint.

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