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Confusion over Obamacare isn't unique

Many federal programs are convoluted but still function
Town hall attendees during a community forum on the Affordable Care Act hosted by Senators Diane Feinstein and Barbara Boxer in Long Beach California
Town hall attendees listen to Peter Lee, executive director of Covered California, speak during a community forum on the Affordable Care Act hosted by U.S. Senators Diane Feinstein (D-CA) and Barbara Boxer (D-CA) in Long Beach, California September 6, 2013.

The health insurance exchanges created by the Affordable Care Act opened for business last week, but just days before their debut, one in three Americans still hadn’t heard of them. Three out of four uninsured individuals didn’t know they were set to open this month. And half the public said they didn’t have enough information about the new health law to know how it will impact their families, according to polling from the Kaiser Foundation.

But Obamacare could be effective anyway. Public policy and health experts say Americans are also largely uninformed about the details of programs like Medicare and Social Security, yet those programs still work. A lack of broad public understanding, these experts say, is not a huge barrier, as long as a critical mass of Americans learn a bare minimum about the advantages of the new health insurance options and opt to enroll in them.

Dr. Donald Berwick, former administrator of the Center for Medicare and Medicaid Services under President Obama and current Democratic Massachusetts gubernatorial candidate, underscored that the big challenge for the Obama administration is not to explain the nuances of public policy, but to convince uninsured individuals that getting covered will be a good deal for them.  "I think the public may not need to understand the details of the mechanism,” said Berwick. “What the public needs to know is the benefits.”

“Medicare succeeds wonderfully and people don’t understand completely what it covers and what it doesn’t,” says Lee Goldberg, vice president for Health Policy at the National Academy of Social Insurance, an organization that supports universal coverage. He points to an August study which found that 42% of Americans incorrectly believe Medicare covers long-term care like home care attendants. These are huge expenses for the elderly that many mistakenly believe are covered.

While more than three in four people say Medicare is important to their families, an accurate understanding of Medicare is much harder to find among the public.  “Three generations have used Medicare and people are still confused,” concludes Goldberg.

Same with the rollout of Massachusetts’ 2006 health care reform law, the model for the Affordable Care Act. It issued an individual mandate, expanded Medicaid coverage, and created a state-run insurance exchange. In February of 2006, half of Bay Staters reported knowing little or nothing about the legislation according to polling conducted by veteran health care pollster Robert Blendon. Despite the lack of public understanding, the percentage of residents who were covered by health insurance rose from 87.5% when the law was enacted to 97% two years later.

Or take Social Security, a wildly popular program that has been available to every senior citizen in the U.S. since the 1930s. A recent RAND survey quizzed Americans on the basics of Social Security and found disastrous results. Half got a D or an F. A middling 4% got an A.

While Social Security benefits are the primary income for most seniors, three out of four people don’t even know how their benefits are calculated. Olivia Mitchell, professor of insurance and risk management at the University of Pennsylvania and one of the authors of the study, says that most people “don’t know the rules and might make big mistakes on how to draw their benefits.” They merely have a “general idea” of what the program is, and they find out more as they get closer to retirement.

And it’s not just government programs that Americans don’t understand. Carnegie Mellon professor of economics and psychology George Loewenstien surveyed individuals who were covered by health insurance and in charge of making health care decisions for their families. Only 14% understood all four of the basic concepts of insurance he tested-- copays, deductibles, coinsurance, and out-of-pocket maximums. The survey was multiple choice, so even guessing would get you right answer 20% of the time.

“People have a very difficult time understanding financial matters, especially insurance matters,” said Mitchell.

But while Americans are generally in the dark about the public -- and private -- programs that they participate in, Obamacare faces unique challenges. Unlike Social Security, Medicare, and Massachusetts health reform which were implemented with bipartisan support shortly after passage, experts note that the opponents of Obamacare have used the nearly four years since the law’s enactment to continue to stoke fear and opposition among the public.

The opposite happened when health reform was implemented in Massachusetts, where everyone ranging from insurers, to health care providers, to liberal and conservative advocacy groups came together to try to promote the benefits of the law.  “I’m sure polls showed people were confused,” said Berwick. “But we got into nearly 100% coverage because people worked together.”

Despite the continued attacks on Obamacare, Avik Roy, senior fellow at the Manhattan Institute and a health care policy advisor to Mitt Romney’s 2012 presidential campaign, is confident in the Obama administration’s ability to reach the young and uninsured and sell the exchanges to them. “They'll be as sophisticated as they can be to reach out to individuals and make them aware of the opportunity to enroll,” said Roy, noting the Obama campaign’s superior outreach operation. Roy is instead worried about another barrier to people signing up. “If the plans are too expensive, people won't enroll.”

The experts agreed on one thing: last month’s polls showing public confusion about what exactly is in ObamaCare will be irrelevant once the insurance plans on the exchanges begin to provide coverage in January. “That is when we switch from a public policy discussion to a consumer discussion,” said Blendon. “For people to be interested at a higher level, the product has to be available to them.”

*This post has been corrected to reflect that Robert Blendon does not lead Kaiser’s polling on the American Care Act. While Mr. Blendon has done joint polls with Kaiser, Senior Vice President Mollyann Brodie is in charge of Kaiser’s polling operation.