This Just In, Insurers Required to Speak Plain English

by Wendell Potter on February 13th, 2012

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 healthcare.gov, 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.