This Just In, Insurers Required to Speak Plain English

HHS stiffens spine and requires health insurance companies to clearly explain their policies.

All the attention paid to the debacle about coverage for contraceptives over the past several days obscured a broader, undisputed win for all consumers, including those who are pregnant or about to be pregnant.

While the media was obsessing about the contraceptives controversy, the Department of Health and Human Services unveiled a final rule that even the Catholic bishops should support. Starting this fall, insurers and employers that offer health care benefits must provide us with more clearly written information about what their benefit plans cover and how much of our own money we’ll have to pay if we get sick, injured or, yes, pregnant.

This is no small matter. Rumors had been circulating in Washington over the past several months that the administration would cave to the demands of the insurance industry’s trade organization that this requirement be gutted to the point of being meaningless for most Americans. The rule requiring that this information be written in plain English was part of the health care reform law.

The powerful insurers’ group, America’s Health Insurance Plans (AHIP), reportedly was hard at work early last week trying to persuade its friends in Congress, including some Democrats, to flood the White House with calls urging that the new requirement be postponed indefinitely and apply only to benefit plans sold outside of the workplace. That would mean that the requirement, if ever implemented, would be of value to only a small percentage of Americans.

So score one for consumers, who don’t often win these sorts of battles in the corridors of power. Starting on Sept. 23, insurers and employers will have to provide much more information than they do now in their marketing materials, and the information will have to be displayed in a standard format to enable comparison among plans. The companies will have to use plain language and 12-point type, meaning the fine print will be a thing of the past. Imagine that.

One of the first members of Congress to applaud the administration’s display of backbone was Sen. Jay Rockefeller (D-W.Va.), who has long championed greater transparency and accountability in the health insurance business.

“Insurance companies will no longer be allowed to hide behind loopholes and complex language to deny customers the benefits they paid for and expect,” he said. “People are going to be able to demand more and more openness and clarity from the health insurance coverage they are spending their hard-earned dollars on. They deserve to be able to easily read and understand different policies so they can make the best decision for their families.”

AHIP, not surprisingly, whined about the new rule, saying it would require “an almost complete overhaul and redesign of how information must be provided to consumers.” You bet it will. And about time, too.

What insurers and employers will have to do is provide us with a standardized summary of benefits and coverage, including a “Coverage Facts” label for health care plans — similar to the nutrition label on packaged foods we have grown accustomed to seeing in grocery stores. So we will finally be able to see, for example, what our deductibles and copayments will be if we choose one plan over another — before we enroll and start paying premiums.

The summaries, which can be no longer than eight pages, will also have to note if there are coverage caps and whether referrals are needed to see specialists. They’ll also have to include two real-world examples — like what and how much a particular plan will cover if we have diabetes or if we get pregnant and how much we’ll have to pay out of our own pockets in both examples.

Consumer advocates had asked the administration to include a third example: what’s covered in the case of cancer. While it will not be mandated this year, advocates are hopeful it will be required soon, maybe even next year. Right now, the summaries aren’t required to detail how much premiums will be, but that, too, might be added in the future.

Consumers will be able to access the summaries not only from insurers but also on, the website created soon after President Obama signed the Affordable Care Act into law.

In a statement issued after HHS announced the final rule, AHIP complained that it “requires that a separate document be available for each potential family size and for every possible benefit design option, including different cost-sharing levels, prescription drug formularies, and network designs.” Well, yes. That’s the point. Hard as it might be for insurers to accept, they at long last have to tell us how much what they’re selling will actually cost.

Wendell is a Senior Analyst at the Center for Public Integrity where this first appeared on 2/13/12.

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4 thoughts on “This Just In, Insurers Required to Speak Plain English”

  1. I agree this is a move in the right direction; however, there’s the math of the business intelligence algorithms that run behind the scenes so I see this changing quite often and with having better language, yes and improvement but how often will it be updated? It’s the world we live in today with data a times. As far as paper and mailing, I made my comment clear there as I don’t want a mailbox full of paper mailed to me each time a change is made.

    Again I see it as a positive move but will it work I guess is what remains to be seen. When so many business parameters are changed so frequently that do affect consumers, how will this work is the question and I said this was part of my series I call the Attack of the Killer Algorithms as they run on servers 24/7 with no human intervention and make life impacting decisions about all of us.

  2. Mr. Potter, although after reading Deadly Spin I think I know you well enough to call you Wendell, thank you for what you are doing. Interestingly enough, Deadly Spin was first loaned (although after one chapter I had to have a book of my own) to me by a retired Canadian doctor who worked his last 15 years in Alabama but lives half the year in Canada and the other half in Alabama. I too am a health insurance company ex-patriot although not on the level that you were. I worked for about 30 years for several different (small) health insurance companies as a claims manager (lower middle manager) and saw first hand how little people knew about their health insurance coverage and how the “profit motive” was abused. I have always been pretty skeptical but Deadly Spin has really made me even more skeptical. I supported President Obama and his attempt at health care reform and I too was disappointed when the public option was left out. I will vote for President Obama again. I am male, 65 years old, and live in Alabama (a raving red state which is another testament to the power of PR). Keep up the good work. Quitting is not an option.

  3. Sounds like an improvement but I really have a difficult time believing that the ” savvyge’ insurance companies in conjunction with their political friends won’t find some way to screw everyone despite the new requirements for transparency. Transparency can mean a whole lot of nothing anymore especially when the average patient is being sold a policy by a sales person who ‘ explains’ the policy to them. I’ll bet transparency will come with a whole lot of transparent ( and not so transparent) exclusions and then Washington can say they did their job well and Mr and Mrs Managed Care can go on about their business lining their pockets as usual.

  4. Sweeet! About time! Furthermore, very much like physicians are REQUIRED to provide and pay for translation/interpreter services for non-english speaking patients, insurers should be required to do the same on their mailings…particularly the kind where they put a claim on hold and refuse to pay it until “they hear back from the patient” . Too often our patients simply discard those letters because they don’t understand them. Just this past week one of my favorite payers, when I brought this up to their attention (once again), indicated the request for information was also available to the patient “via the web”. Well, the patient was not internet savvy either. This is medical care we are talking about!

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