If you or a loved one has ever been tripped up by “the fine print” in your health insurance policy, you will be pleased by a provision of the Affordable Care Act that took effect this week. As of September 24, 2012, private health insurance plans provided by employers or that individuals purchase on their own must use standardized charts and explanations clearly laying out what they do and do not cover, as well as other important things to know about how the plan works.
The ‘Summary of Benefits & Coverage’ requirements also include a standardized glossary of commonly-used coverage and medical terms, as well as at least two ‘coverage facts labels.’ Modeled after the ‘nutrition facts label’ required on most packaged foods, the coverage facts labels are sample illustrations of costs and coverage for common coverage scenarios, like diabetes treatment or maternity coverage. These sample illustrations are provided so consumers can get a sense of what their real costs could be.
Note that not every group health plan is required to provide the forms. Medicare, Medicaid and so-called ‘grandfathered’ private health plans (plans in place just as they were when the Affordable Care Act was signed into law) are not required to provide the Summary of Benefits & Coverage charts.
Studies tell us that the public is eager for help making sense of health insurance. In a 2011 nationwide public opinion, participants ranked the requirement that insurers and health plans provide easy-to-understand summaries of their coverage above all other provisions of the Affordable Care Act. Consumers Union, publishers of Consumer Reports magazine, helped develop the forms and tested them out in focus groups. They hope to get more feedback as people start seeing them during their health plan’s open enrollment season, or when individuals go shopping for health coverage on their own. That’s when health plans must provide the charts customized to plan(s) being described. You can check out sample versions of the charts, along with Consumer Union’s notes on what to pay most attention to here.