Under a little-known provision of the health overhaul law, insurers will be required to provide their benefits information on a standardized chart using the same plain English terms as other companies to help shoppers understand and compare complicated policies.
This will make choosing a health insurance policy easier and “will force the insurance companies to reveal information in a consistent way,” says Bonnie Burns, our Training and Policy Specialist. “It should make it easier for people to understand what they’re getting and not getting.”
In the provision, Congress even listed some of the insurance jargon – including terms such as deductible, preferred provider, excluded services and UCR (usual, customary and reasonable) – that must be defined in a glossary that will accompany the benefit summary. It directed the National Association of Insurance Commissioners to form a group to develop the materials and specified that the group include state insurance regulators, consumer and patient advocates (such as Bonnie Burns), insurance companies and health care providers.
These materials will be sent to the Department of Health and Human Services and Department of Labor. Those departments will issue regulations spelling out how insurance companies and employers must use the materials. The new system must be in place by March 2012.
Right now it’s hard for consumers to shop for coverage, compare plans and make good choices. For example, one study compared breast cancer treatments under 3 different California policies. It found that a patient would spend nearly $4,000 for a typical treatment under one policy and as much as $38,000 under another policy, both of which had similar deductibles and out-of-pocket limits. These changes will make a significant difference in helping people compare coverage plans with ease and prevent such a potential consequence of choosing the “wrong” plan.
The law even prohibits the use of “fine print” by mandating at least a 12-point type size. In addition, any exceptions or limitations to coverage must be included along with the out-of-pocket costs that plan members can expect to pay. Examples of the costs for some common medical treatments must also be provided in a separate “coverage facts label” modeled after the nutrition facts label that appears on prepared foods.
Karen Pollitz, the deputy director for consumer support in the HHS Office of Consumer Information and Insurance Oversight, helped develop the concept of a coverage facts label when she was a research professor at Georgetown University’s Health Policy Institute. She is one of the officials who will review the materials. Pollitz co-wrote a report last year that highlighted consumers’ need for better insurance information.
It has been challenging for the group to decide what information consumers needed when choosing a policy and to translate insurance jargon so that a normal person understands what it is. The group’s nearly 4 dozen members held 25 meetings and conference calls, some as long as 6 hours.
This article was edited in part from a Kaiser Health News article, 12/15/10.