Maybe our brains just aren't wired for ObamaCare

Let’s say an individual is choosing between two silver plans. Plan A has a low deductible, high out-of-pocket maximum and copayments for physician visits and prescription drugs that do not apply to the deductible (meaning the insurer covers most of the cost of these services even before the deductible is met). This plan would be attractive to patients with relatively low health expenditures, but high-spenders might spend thousands more than they would in, say, plan B. Plan B has a similar deductible, but lower out-of-pocket maximum and requires the deductible to be met before it pays for any services. This plan would be attractive to patients with high overall medical costs, but much less so for low-spenders who now bear the full cost of their initial check-ups and drug refills.

If all that sounds complicated, it’s because it is: While understanding a plan’s cost-sharing structure is crucial for making good decisions, it is also the skill with which people are most likely to struggle. A recent study by the Commonwealth Fund found that people had great difficulty understanding and manipulating terms like coinsurance, allowed amount, deductibles and annual limits—leading to “deep-seated confusion and lack of confidence with respect to health plan cost-sharing.” Even health-literate participants had trouble estimating their total out-of-pocket spending, and often selected plans not in their best interest. This is particularly concerning for those enrolling in the exchanges, many of whom have long been uninsured and have low levels of health literacy.