From The Wall Street Journal:
Associated Press/Don Berwick, head of the Centers for Medicare and Medicaid Services, will help unveil the plan Wednesday.
Consumers shopping for health insurance will soon get a peek at a new standard form—akin to the nutrition label on food products—that will lay out the details of each policy, from deductibles to how much it might cost to have a baby.
Currently, states mandate certain disclosures from health insurers, but they vary by state. The information often comes as part of a document known as the certificate of coverage or evidence of coverage, which can run to dozens of densely written pages and is often supplied only after a consumer has signed up for a policy. Employers offering coverage typically provide materials to their workers, but these also don’t follow any common national format.
“It’s very inconsistent,” said Karen Pollitz, a senior fellow at the nonpartisan Kaiser Family Foundation and a former Health and Human Services official.
The proposed new summary is expected to closely follow a draft version from a committee convened by the National Association of Insurance Commissioners, people with knowledge of the matter said. Health and Human Services is expected to finalize the form after a public comment period.
Insurers said they were concerned about the potential cost and administrative burden of the new requirement, particularly if they have to create different iterations of the form for every possible plan design a consumer could explore and for every single employer.
“Some plans would be providing tens of thousands of versions of this document,” said a spokesman for America’s Health Insurance Plans, an industry group.
The summary form has often been compared to the food-nutrition label, though it is substantially longer, and at six pages the draft offers considerable detail. For instance, it would not only tell consumers their overall deductibles, or the amount they must pay before coverage kicks in, but would also explain deductibles for specific categories, such as drug coverage. In addition to flagging the limit on a consumer’s out-of-pocket expenses, the form would lay out which expenses don’t count toward that limit.
A list of medical events and associated services, such as home health care and emergency transportation, would likely be shown along with the consumer’s costs for each. The summary would also explain the consumer’s possible expenses for three common situations: having a baby, treating breast cancer and managing diabetes.
The form would likely be given to people shopping for plans, before they are locked into a selection, by means including insurance agents, email, or websites where policies are sold. Under the health law, it is also supposed to be supplied to workers with employer coverage, when they sign up for plans as new hires or during open enrollment. However, regulators are likely to ask for comment on whether alternative equivalent documents might be acceptable for big employers, people with knowledge of the matter said.
“It would be a big deal to consumers, because they will have a standard way of receiving information,” said Amir Mostafaie, director of quality and training at eHealth Inc., parent company of the online insurance marketplace eHealthInsurance.com.
Research has shown consumers are often confused about the details of their insurance. In a McKinsey & Co. survey of consumers, 72% agreed that health plans are sometimes so complicated it is difficult to understand what is covered or what services cost, according to the consulting firm, which polled around 11,000 people under age 65 late last year and early in 2011. In addition, 57% said that they found the process of choosing health insurance overwhelming.
For insurers, the new form would likely have the biggest sales impact in the individual insurance market, which is expected to grow substantially after 2014, when most of the health-care overhaul takes effect. Already, companies are increasingly focused on how to craft marketing and brand-promotion efforts that will resonate with consumers.
“It’s not an industry that has been consumer-centric,” said Raj Bal, a former executive at insurer WellPoint Inc. who is now an industry consultant. Once it is in effect, the form will likely help shape plan designs and promotion.
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