We got some good news last week from the Administration – new rules for individual and group health plans that require them to disclose critical information about their benefits and out-of-pocket costs. For many of us, this is sort of “ho-hum” news because our employer pretty much makes the decisions about what health plan to buy. And if we get a choice of plans, our employer often provides us with helpful summaries we can use to compare and choose the plan that’s right for us.
But for millions of Americans who don’t have job-based coverage, it is not so easy to make an informed choice. Because of differences in how coverage works, even different ways deductibles work, it is almost impossible to compare health insurance options across plans. Even worse, rarely do two insurers use the same definition for the same terminology, leaving consumers to make decisions in the dark.
Thanks to the proposed rule issued last week, this “Wild West” of an insurance market is going to change. As we shift toward a system in which everyone has both the right and responsibility to have coverage, consumers need access to unbiased, standardized information about benefits, cost-sharing, and any limits or exclusions in the policies available to them. This new information, delivered in a consumer-friendly format, will be available for individuals and families buying their own coverage, people with job-based coverage, and coverage sold through Exchanges starting in 2014.
Beginning as early as next year, this information will help consumers make “apples-to-apples” comparisons about what is covered, what is not, and out-of-pocket expenses. Plans must disclose, up front, any limits or exclusions to the plan. All insurers will be required to use the same standard set of definitions, and provide new “coverage examples” that will help consumers assess the relative generosity of each plan’s benefits in common medical scenarios, like pregnancy, breast cancer, or diabetes.
However, the proposed rule also raises questions, and it will be important to see them resolved so that these new disclosure rules truly benefit consumers. For example, the final version of the rules should clearly state that insurers and group health plans must make available the summary of coverage on their webpages, healthcare.gov, and on current and future Exchange sites. Consumers should not have to make special requests or provide personal information to get this information. The Massachusetts Exchange makes this kind of comparative information available on its website – and Congress intended all Americans to have access to similar shopping tools.
The proposed rule also requests comments on whether larger employers should be allowed to embed the new coverage summary in their “summary plan description” (SPD), which is a detailed description of the plan’s coverage and how it operates. But those SPDs are often highly technical and complex. Most likely, embedding the short, consumer-friendly summary of benefits form in the lengthy SPD means it will never be seen by the vast majority of employees.
The Administration is asking for comments on these issues before they finalize the rules. Insurance companies and employers are already complaining loudly – it will be important for consumer groups to weigh in too.
– Sabrina Corlette, Research Professor Health Policy Institute, Georgetown University
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