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.
This blog was originally posted on Community Catalyst’s Health Policy Hub.