Study: Consumers don't understand insurance basics August 7, 2013 | By Dina Overland Read more: Study: Consumers don't understand insurance basics – FierceHealthPayer Subscribe at FierceHealthPayer

Many health industry experts have warned that consumers don’t understand the health reform law’s provisions, and a new study says that’s because consumers don’t even understand how insurance works.

Carnegie Mellon University surveyed 202 adults, finding only 14 percent correctly understood four basic insurance concepts–deductibles, copays, co-insurance and out-of-pocket maximums, according to a study published in the Journal of Health Economics.

When asked to calculate how much a hospital stay would cost them based on a sample health plan, only 11 percent of survey respondents calculated the correct amount. “And people were off by a lot–thousands of dollars,” lead researcher George Loewenstein, economics and psychology professor at Carnegie Mellon, told NPR Shots.

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