Thursday, November 10, 2011

Consumers Union joins HHS, Labor Department in Announcement of New Health Insurance Labels

WASHINGTON, D.C. – A proposed regulation announced by the Department of Health and Human Services (HHS) today will ensure that health insurance coverage information is available to consumers in a clearer and consistent way. The rule establishes a format for the new, standardized Summary of Benefits and Coverage form. The form is required by the 2010 Affordable Care Act as a way for Americans to better understand the coverage offered by health plans.

Lynn Quincy, senior health policy analyst for Consumers Union, the nonprofit publisher of Consumer Reports, will join Dr. Don Berwick, administrator of the Centers for Medicare & Medicaid Services (CMS) and Dan Maguire, director of Office of Health Plan Standards and Compliance Assistance, Department of Labor (DOL) in a teleconference later today to discuss the rule.

“By making the terms of health insurance plans easier to understand, consumers are less likely to find themselves in health plans that don’t meet their needs. Consumers Union has heard too many stories of consumers that purchased a health insurance plan that they didn’t understand.

Creating this health insurance disclosure will help reduce that confusion much in the same way that recent disclosures for mortgage terms or credit cards have helped to better inform consumers,” said Quincy.

Receiving the new Summary of Benefits and Coverage form in 2012 will be the first interaction with the Affordable Care Act for many consumers. Consumers Union intends to continue to monitor consumers’ use of the form and work with HHS and the National Association of Insurance Commissioners to refine the form over time to best serve the needs of the consumer.

Additionally, new Coverage Examples included in the rule announced today take traditional health plan information, such as premiums and patient cost-sharing, and calculates the bottom line cost for a consumer for some hypothetical medical scenarios such as having a baby, treating breast cancer, and treating diabetes so that consumers can get a better picture of what their real costs will be.

Consumers Union released a report earlier this month that found consumers believed this new type of health insurance disclosure helped them better understand their coverage options. The report was based on consumer interviews and usability testing of two labels prototypes developed by the National Association of Insurance Commissioners (NAIC). Support for the study was provided by the New York State Health Foundation and the Missouri Foundation for Health.

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