Health insurance confusion could be avoided in the future
Confusion is a common problem in the insurance market, especially where health insurance is concerned. Consumers often express their confusion over the coverage options they have, with many consumers claiming that they do not have enough access to information concerning health insurance policies before they make a purchase. Jay Feinman, a professor of insurance law at Rutgers University, has begun drawing attention to this issue, suggesting that health insurance policies should be made more straightforward for the sake of consumers.
Consumers have limited access to information before purchasing policies
Typically, consumers are able to choose the type of coverage they want and the deductibles they are willing to pay when purchasing a policy. Certain information, much of which can be considered “fine print” for insurance policies, is not available to a consumer until after they have made a purchase. This is a common practice in the health insurance business as it helps mitigate any potential problems a company may experience in selling policies. Because the fine print often details what a particular health insurance policy does not cover, having full access to such information may steer consumers away from the insurer.
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Nevada successfully mitigates confusion
Feinman suggests that this practice does not need to be so prolific in the health insurance industry. The professor cites an initiative from the Nevada Division of Insurance that was launched in late 2011. Per this initiative, the state provided information concerning the insurance policies that consumers often purchase, providing them with access to information that had traditionally been withheld. Feinman claims that this has helped consumers make better choices concerning their insurance needs. In the wake of Hurricane Sandy, such measures may be sorely needed throughout the country.
Powerful storm highlights the confusion that consumers are suffering from
Hurricane Sandy dealt a powerful blow to the East Coast. While strong winds caused only modest damage, the storm produced major flooding throughout many cities. Many consumers found that their insurance policies did not cover the damage caused by floods because of how their properties were defined by the insurance policy. Many of these people were unaware that their policies would not cover the damage associated with the storm because they were not provided with this information before they purchase coverage. Feinman claims that the Nevada Division of Insurance could serve as a strong example of how to address the issue of confusion within the health insurance market, as well as the confusion that exists in other sectors.