New HHS rule requires insurers to present health plan benefits in plain language
Health insurers will now be required to publish marketing materials in plain language and eliminate the technical or confusing language that can often make if difficult for consumers to understand exactly what they are buying, under a new provision of health reform.
The new rules, published jointly by the Departments of Health and Human Services, Labor and Treasury are intended to give consumers a clear understanding of exactly what individual health plans cover, what limitations may apply and what they will pay for health services, with the ultimate goal of making it easier for consumers to make direct comparisons of one plan to another.
"Consumers, for the first time, will really be able to clearly comprehend the sometimes confusing language insurance plans often use in marketing," said HHS Secretary Kathleen Sebelius in a press release announcing the new rule. "This will give them a new edge in deciding which plan will best suit their needs and those of their families or employees."
Under the regulation, health plans must provide two vital documents to consumers: a concise Summary of Benefits and Coverage (SBC) and a uniform glossary of terms commonly used in health insurance coverage.
America's Health Insurance Plans noted that the final rule made some important changes to the preliminary rule, which was released last August, but also argued that the time given to implement the changes – consumers must receive the new materials starting October 1 – was insufficient.
Karen Ignagni, president and CEO of AHIP released a statement in response to the final rule that said "additional time and flexibility are needed to avoid imposing costs that outweigh the benefits to consumers."
"The benefits of providing a new summary of coverage document must be balanced against the increased administrative burden and higher costs to consumers and employers," she continued.
Consumer groups hailed the release of the rule, something they have seen as vital to help individuals understand the different types of coverage out there in order to choose the plan that is appropriate for them.
Consumers Union, the policy and advocacy arm of Consumer Reports noted that the rule "takes important steps in demystifying health insurance coverage" and also leaves latitude for making changes and improvements to the coverage disclosures.
Consumers Union took an active role in helping move the Summary of Benefits rule forward. In early August, as HHS was preparing to releases the interim rule, it released market research that showed consumers believed the new label for insurance – often likened to the nutrition label on food products – would help them have a better understanding of their insurance options.
"A driving force behind the Affordable Care Act was to make the health insurance market work for consumers," said Lynn Quincy, senior policy analyst for Consumers Union, in a prepared statement. "The new Summary of Benefits provides consumers with important insurance information in a standardized way for the first time."
Of particular aid to consumers, Quincy noted, are the costs breakdowns of two common scenarios: having a baby and treating diabetes. These breakdowns are intended to help consumers understand the out-of-pocket expenses they would face under the different plan designs.
One feature not included in the regulation is a requirement showing premiums. Conumers Union said it intends to press the government to include this information so consumers can understand the overall costs of health coverage.
