Work in the insurance industry long enough and you will hear the same issue over and over again: that the basic individual cannot understand an insurance policy.
This issue is why the Patient Protection and Affordable Care Act (“PPACA”) includes the creation of a standardized summary of benefits and coverage explanation for non-grandfathered plans. This provision will go into effect March 23, 2012.
This provision also requires the Department of Health and Human Services and the National Association of Insurance Commissioners to invent these standardized documents.
This is a great undertaking and if done right, can be a very useful tool to finally explain to an individual how a health plan works. It would also allow individuals to comparison shop plans and select the plan that best fits their needs.
Of course, nothing in insurance is that simple. There are many components to a health plan and it can be quite confusing to explain benefits with terminology that needs to be defined as well.
This is the type of situation the NAIC is finding itself in a recent focus group it conducted to test “coverage facts labels”. This is a document that would illustrate coverage under common benefits scenarios, like what an individual would pay for having a baby, managing diabets or treating breast cancer.
In one focus group, participants compared two documents. Here’s example one and here’s example two, courtesy of Susan Jaffe who reported on the results.
“A young man dives into the task, but is stopped by the word co-insuance. The form offers a definition he says he doesn’t understand. During a break halfway through the session, he tries unsuccessfully to call a friend who is an insurance agent.
… One woman, who appeared to be in her early thirties, said she and her husband have no insurance and go to a free clinic for medical care. The forms puzzled her, until some numbers grabbed her attention: ‘Showing what the plan is paying and what I’m paying, that’s a big eye-catcher for me,’ she said. ‘A lot people think they are paying for the majority of the cost.’
The testing targested the ‘coverage facts labels’. The labels say that the information can help consumers compare plans by showing how much they would pay for procedures based on the national average costs. A beneficiary’s actual costs might be different, based on the doctor’s advice, what providers charge, how much the policy pays, amonth other factors. That didn’t go over well with some testers.
‘The word ‘might’ ruins everying,’ one young man says. ‘It’s kind of sketchy.’”
At the end of the focus group, testers are asked which plan they would buy. All except two participants are able to make a decision. Not too shabby of a result for testing something full of insurance terms.
What is your opinion of the samples?
Filed under: Group Medical, Health Care Reform, Plan Administration, Sales Tools Tagged: | health care reform, new benefit summaries, nutrition labels for health plans
