A nutrition label for health insurance
See this? This is what an insurance plan looks like. Or, will look like pretty soon. Released Wednesday by the Obama administration, this is part of a draft of the new, standardized summary of an insurance plan that carriers will have to offer prospective subscribers starting in March.
You can see the full, four page version here. The information included above reflects an example plan, not any set of benefits that the administration is endorsing.
Think of it as a nutrition label for health insurance, with a rundown of what procedures cost. It includes everything from having a baby to picking up a generic drug at the pharmacy. It’ll certainly be more complicated than anything you’d find on the back of a cereal box, but likely a lot simpler than what we have now. The big focus in drafting this document - a process that has taken the better part of last year - was making insurance accessible to consumers. The font, for example, must be at least 12-point size. The document is limited in page length.
A McKinsey study, cited in a Wall Street Journal article this morning, underscores how much a document like this is needed. More than half of consumers say they find buying insurance overwhelming; 72 percent say it’s “difficult to understand” what things cost.
One possible hiccup in implementing this provision of the law now: It could create some confusion in the individual market. Most insurance plans there are underwritten, meaning that insurers charge more to patients who they think will be more expensive, likely those who are older or have a pre-existing condition. The insurance form notes this with the explanation, “After the insurer reviews your application, your actual premium may be higher or your application may be denied.” So a disconnect could emerge between what consumers see on this form - an estimate based on preliminary information - and what the carrier ultimately charges.
How much use these forms get is also likely to be somewhat subject to how highly they’re publicized. As an Health and Human Services fact sheet, released Wednesday morning, says, the summary will be provided “to shoppers and enrollees upon request and before they buy coverage.” Consumers will need to know to request this form, while comparing plans, to make use of it. Part of that will hinge on a good PR campaign, to ensure that consumers know about the new summary of benefits before selecting a plan.