Your Health Insurance . . . Revealed!

By Guest Blogger

This blog was written by Lynn Quincy, Senior Policy Analyst at Consumers Union.

A key hurdle to getting people enrolled in health coverage is of the fact that shopping for health insurance is so difficult. In our consumer testing studies from 2010 and 2011, consumers told us that shopping for health coverage was one of the hardest shopping tasks they faced. In another survey, consumers report that they’d rather go to the gym or pay their taxes than shop for health coverage. 

This week, shopping for health coverage got a little easier.

Introducing the New Summary of Benefits and Coverage Form

Beginning September 23, 2012, all private insurers must provide a description of their health plans in a standardized way. Plan descriptions will look something like this:

 

Click here for a more detailed image. 

This change will make it easier for some 170 million Americans who currently have private health coverage to understand what their plans cover. It will also make it easier for millions more Americans to sort out their coverage options when health insurance exchanges open their doors next year.

Although this new Summary of Benefits and Coverage form is not required for Medicare, military coverage (like TRICARE or Veterans Administrative), Medicaid, or the Children’s Health Insurance Program (CHIP), it is required for all private plans, including those that will be offered through health insurance exchanges in 2014.

What Makes the New Descriptions Easy to Understand?

Back in 2011, Consumers Union and many other stakeholders (including insurers and brokers) worked with the National Association of Insurance Commissioners to draft the Summary of Benefits and Coverage form. Cognizant of the far-reaching impact of the form, Consumers Union offered to test the draft with real consumers. This testing showed that the summaries really helped consumers and that they were less confusing than traditional materials. In particular, consumers liked: 

  • Embedded definitions of key insurance terms like deductible and out-of-pocket limit

Example:

When a service is subject to a deductible, you must pay all the costs up to the deductible amount before the health insurance plan begins to pay for covered services.

  • Benefit descriptions that are always organized the same way, making it easier to compare coverage options
  • Exceptions to coverage that are all listed in one place

  • A new way of explaining how the plan covers certain medical scenarios, called Coverage Examples

Consumers can now purchase coverage with a much clearer idea of what’s covered and what isn’t (unlike the woman in this story). Not only is this fairer to consumers, but it is potentially transformational: improved transparency in the marketplace can lead to more competitive health insurance markets.

Help Get the Word Out!

It is important that consumers learn about their new benefit. You can help spread the word in a number of ways:

  • Contact your local media to make sure they know about this new consumer benefit.
  • Tell your members about the new form. They may need to ask for it if insurers or employers don’t provide it directly.  Feel free to include a link to this handy guide from Consumer Reports.
  • Looking ahead, Consumers Union plans to work closely with the federal agencies that are in charge of this form to improve it even more. To that end, we are collecting feedback from real consumers who received the form. Send folks to www.SBCFeedback.org so they can report what they liked and what they didn’t like about the form they received. 
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