Health plans preparing new insurance coverage summaries

Insurers must send enrollees and prospective members documents that allow for comparisons of coverage, but they say the requirement could lead to higher premiums.

By — Posted July 23, 2012

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

The government wants insurance policies to have labels like nutrition facts on breakfast cereals, and health plans are busy creating them to mail to their customers this fall.

Under the Affordable Care Act, insurers must give each consumer buying or renewing coverage a standardized Summary of Benefits and Coverage form. The requirement applies to policies sold or renewed after Sept. 23. That date is an extension from the March 23 deadline written in the health reform law.

Health plans must detail out-of-pocket costs, disclose any coverage exclusions, and outline coverage for two common episodes of care: childbirth and managing well-controlled type 2 diabetes.

The American Medical Association has been supportive of the new rules, which were adopted largely from recommendations by the National Assn. of Insurance Commissioners. In 2010, the AMA called on insurers to be clearer about out-of-pocket costs and benefit limits as part of its Health Insurer Code of Conduct.

Insurers say they already provide consumers with plenty of information about coverage. They said the redesign of benefit summaries will be expensive and drive up the cost of coverage.

Health insurance trade group America’s Health Insurance Plans estimates the initial cost at $188 million and annual cost at $194 million — roughly more than $1 per year for each of the 180 million enrollees. The estimates were considerably higher than the government’s, which put the 2012 cost at $73 million and the 2013 cost at $58 million.

The new forms will give consumers significantly better information in a clearer format than what health plans now offer, said Lynn Quincy, senior health policy analyst for Consumers Union, the nonprofit advocacy group that publishes Consumer Reports. Even if AHIP’s estimates are correct and the entire cost is passed on to consumers, most people would be happy to pay $1 for a better understanding of their coverage, she said.

Consumers Union did a series of tests in which consumers evaluated the template summary of benefits and coverage. Quincy said participants liked having the ability to compare one plan against another by what it would pay for childbirth or diabetes care.

Another favorite was the explanation of coverage features under the heading, “Why it matters.” Quincy said that’s helpful in elucidating terms that are unfamiliar to the typical health plan customer.

Quincy said giving patients better information about their coverage represents one step toward making them better shoppers and decision-makers.

“Consumers feel like when they consume medical care and have insurance, it’s like having a blindfold on,” she said. “They really need help, and this form goes a long way toward helping them.”

Back to top

External links

Template for health plan summary of benefits and coverage (link)

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn