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Insurers begin using standardized consumer guides

The health system reform law requires uniform summaries of benefits and coverage templates designed to allow enrollees to understand complex insurance information.

By Charles Fiegl — Posted Oct. 5, 2012

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Health plans now are providing more consumer-friendly summaries of the insurance coverage they offer patients.

The 2010 health system reform law required insurers to detail coverage using uniform documents and standardized definitions to explain patient benefits and cost-sharing responsibilities. Sept. 23 was the official deadline for health plans to begin using the new documentation.

The summary of benefits and coverage form contains key information beneficiaries need during health plan enrollment periods, said Dept. of Health and Human Services Secretary Kathleen Sebelius during a Sept. 24 conference call with reporters. The document, which she likened to a food nutrition label, tells patients what they need to know when comparing insurance plans without having to read through dozens of pages of fine print and footnotes.

“Americans shouldn’t have to make a decision as important as picking a health plan for themselves and their family or their employees without having all the facts,” Sebelius said.

The template reviews deductibles and out-of-pocket limits and states whether a plan uses a network of physicians and other health professionals. Health plans also must detail if they exclude certain services from coverage.

The American Medical Association and other patient advocates have been supportive of the rules. But organizations representing insurers had said stiffer labeling regulations were not needed, because many had developed systems to communicate coverage effectively to prospective beneficiaries. Adapting individual systems to use the new government format during a short time frame in 2012 was projected to cost insurers roughly $190 million.

Consumer groups applauded the standardization of the documents so beneficiaries could conduct side-by-side comparisons. The “fact labels” give health plan purchasers information free of industry jargon, which can be confusing to most of the general population, said Lynn Quincy, senior health policy analyst for Consumers Union, the policy and advocacy division of Consumer Reports.

“We know that this new form will help take some of the mystery out of health insurance, but we also want to hear from consumers about their experiences and how to make it even better,” Quincy said.

Beneficiaries who don’t receive the standard summary statement are urged to contact their insurance companies or employer benefits managers.

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