New ‘Summary of Benefits’ Requirement to Greatly Improve Understanding of Health Policies, Simplify Plan Comparisons
‘Summary of Benefits’ Forces Insurance Companies to Use Plain Language to Describe Plan Benefits
Washington, D.C.—Starting in September, health care consumers struggling to understand and compare health care policies can put away their dictionaries and medical journals, stop their Web searches, and even take off their secret decoder rings. That’s when new rules go into effect requiring insurers to provide concise, plain-language descriptions of the benefits and costs of private health insurance plans.
A new report from Families USA titled “Decoding Your Coverage” discusses the information that insurers now must make available to consumers. The report details who will benefit from this information, and it illustrates the kind of information that now will be available, using coverage for type 2 diabetes as a prime example.
In time for the fall enrollment period, insurers must now make a “Summary of Benefits and Coverage” available for every policy, describing the basic features of that policy in four, double-sided pages with no fine print. The Summary of Benefits, which is required by the Affordable Care Act, has one primary task: taking the jargon, lingo, buzzwords and other confusing language out of health plans descriptions and make it possible for shoppers to make apples-to-apples comparisons between plans.
Being able to understand exactly what a health plan offers will have far-reaching consequences for health care consumers, according to Families USA. The group argues that better understanding of policies can lead to wiser policy shopping and smarter use of all the benefits provided in a health policy.
“Without a clear understanding of what a policy covers, consumers may delay or forgo care, make wrong choices about treatments, and even end up with unexpected health care bills,” said Ron Pollack, Executive Director of Families USA. “When comparisons and choices are stated in plain language, families will know what benefits are provided and will be able to make coverage choices based on their needs, as well as the costs they will incur.”
The effect of the new coverage summaries will be far-reaching. The Families USA report reveals that:
* 173 million people (65.1 percent of all non-elderly Americans) with private coverage will be helped by the Summary of Benefits and Coverage;
* Ninety percent of Americans who will be helped by the Summary of Benefits are insured through an employer-based health plan;
* Half of all Americans with employer-based coverage (more than 78 million people) get coverage through their own jobs, while half get coverage as dependents; and
* Nearly 19 million non-elderly Americans who buy health insurance on the individual market will be helped by the Summary of Benefits and Coverage.
As a shopping tool, these summaries will be an enormous asset to many millions of workers who are employed by companies that offer a choice of plans:
* Nearly two-thirds of American workers (65.6 percent of all workers, more than 71 million people) are employed by companies that offer a choice of health plans.
* More than 8 in 10 people employed by large companies (84.6 percent, or 43 million people) work for a company that offers a choice of plans.
* More than one in four small business workers (26.7 percent, 8 million people) are employed by a small business that offers a choice of health plans.
“Health plans clearly win the prize for being the most difficult major product for families to compare,” Pollack said. “Now, consumers will have a simple, easy-to-use tool that will make clear what their health plan covers, just like nutrition labels tell us what's in our breakfast cereal.”
The Summary of Benefits will provide additional important information for policy holders, including:
* Their rights to continue coverage;
* Their right to appeal health plan decisions;
* How to find answers to questions about coverage;
* Which providers participate in the plan’s network;
* What the cost difference may be for using providers inside and outside of the plan’s network,
* Which prescription drugs are covered under the plan; and
* How to get immediate access to specific details of coverage.
“Because of the Affordable Care Act, beginning this September, consumers will no longer be forced to take a stab in the dark when it comes to their health insurance,” said Congresswoman Rosa DeLauro (D-CT). “Instead, they will be able to make informed choices about the health insurance that is best for themselves and their families, the same way they can about a car or any other major purchase.
These new summaries of benefits and coverage provide plain English information about health insurance plans and clear examples of coverage so consumers can make an apples-to-apples comparison of their options. And, as identified by this report, 173.5 million Americans under 65 will benefit from these summaries, including over 90 percent of Americans insured through a job-based plan. That includes 2.3 million men and women under 65 in my state of Connecticut - over 75% of the non-elderly population.”
“The Summary of Benefits and Coverage will help to eliminate the uncertainty that comes with choosing a health insurance plan for the nearly 26 million Americans with diabetes, and the 79 million with prediabetes,” said LaShawn McIver, MD, MPH, Managing Director of Public Policy and Strategic Alliances, American Diabetes Association. “This requirement provides a helpful snapshot of how much financial protection a patient with diabetes could expect from a particular plan over the course of a year.”
“The Summary of Benefits and Coverage is one way that the Affordable Care Act is starting to make the health insurance market work for consumers, said Lynn Quincy, senior health policy analyst for Consumers Union, the policy and advocacy division of Consumer Reports.
“Consumer testing showed us that part of the reason consumers dread buying insurance is because they don't understand it,” Quincy said. “That same consumer testing found that the new Summary of Benefits and Coverage, especially the coverage examples that calculate the bottom line consumer cost for hypothetical medical scenarios, helps to demystify health insurance. This new tool helps consumers be smarter shoppers that are less likely to find themselves in health plans that don't meet their needs."
“The new requirement that insurers provide a Summary of Benefits and Coverage is a little-known provision of the Affordable Care Act, but it is one that every health insurance consumer will value,” Pollack said. “Like virtually every provision of the health reform law, it addresses a real problem—trying to understand one’s policy or compare health policies—that families have faced for years, and soon effective help will be available.
“The Summary of Benefits and Coverage will make us better, more-informed shoppers for health insurance, a purchase that is so vital to us and our families’ well-being.”
A copy of the Families USA report, “Decoding Your Coverage: The New Summary of Benefits and Coverage,” is available at http://familiesusa2.org/
Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan, and its mission is to secure high-quality, affordable health coverage and care for all Americans.
1201 New York Avenue, NW * Washington, DC 20005 * 202-628-3030 * Fax: 202-347-2417 * E-mail: email@example.com * Web site: www.familiesusa.org