Labels describing key features of health insurance policies will become a reality this fall fulfilling a provision of the health reform law that called for more disclosure and transparency. The idea was to copy the labeling for food products that disclose nutritional information.' No more buying the proverbial pig in the poke.
Few would quarrel with the need for common, simple language for insurance policies, and the proposed labels do clarify some confusing insurance terms and outline some basic coverage facts.' The four-page double sided disclosure form now required tells shoppers the amount of the deductible and what health care services do not count toward reaching it.' It reveals the maximum you will pay out-of-pocket for health services and tells you that amount might be higher if you use out-of-network doctors.' These are good things to know.' '
Disclosures will also give the amount of coinsurance'that portion of a bill you have to pay yourself.' ' That, too, is useful because coinsurance is becoming more important than copays'the flat amount like $25 or $35 you pay for a given service.' Helen Darling, who heads the National Business Group on Health, and who knows what employers are up to when they select coverage for their workers, says coinsurance is a more subtle way of shifting medical costs to consumers.' ' Subtlety calls for transparency.'
But the labels for health insurance coverage will not be like shopping for canned peas.' When you pick up a can of vegetables, you know the price so you can compare Del Monte's brand with the cheaper supermarket label to see if Del Monte offers better value.' That will not be the case with insurance policies.' Even though the proposed rules issued months ago by the Department of Health and Human Services called for premium disclosure, officials decided that premium information was not necessary after all.' Insurers and employers had complained that giving premium information alongside policy details would be too difficult.' Maybe it would have just revealed too much.
In announcing the new labeling rules, Steve Larson, an HHS official, said: 'People have premium information.' They will have that.'' Larson explained that the goal of these disclosures 'was to focus on coverage, benefits and how they interact.'' But coverage and benefits interact with the price, and no insurance company would design a policy without considering the premium.' So without knowing the premium you still may be buying the pig in the poke.' ' A policy with coinsurance of 40 or 50 percent might carry a cheaper monthly premium, but consumers need to know if paying less each month is worth the risk of having to pay more on their own if they get sick.' ' '
Yes, consumers can find out the premium.' Its likely employers will include it with the summary of the coverages they give their workers.' But people buying on their own'and there will be millions more of them when health reform becomes fully effective'will have to call the insurers, making the shopping task more complicated.
There are three problems with these new labels:
Problem #1: Consumers will not be able to compare the price and features of health insurance policies without a lot of extra work on their part.
Furthermore, the rules do not require insurers or employers to provide paper copies of the disclosures.' Someone shopping around may compare five or six choices and doing that on a computer can be taxing.' Employers and insurance companies can make disclosures electronically for employees already enrolled in group health plans, for employees who are not already enrolled in these plans and for individuals who are 'purchasing' insurance.' These folks are supposed to get an e-mail or postcard advising them they can ask for a paper copy.' ' But individuals simply 'shopping' for insurance will have to use the government website www.healthcare.gov to retrieve the disclosures.' As an added hurdle, employees already in a group health plan must give consent for their disclosures to be provided electronically.' '
Problem #2:' Getting access to paper and/or electronic copies of these new insurance disclosure forms will vary depending on whether you are getting individual health insurance or employer-based coverage.' More work for consumers.
This is all sounding a little nutty, and the extra steps may not make shopping easier.' There will still be fine print.' 'This is only a summary,' says the disclosure form, and it advises shoppers to consult the policy itself or the plan document for more details.' Too many consumers will simply buy whatever seems easiest or what some agent recommends.' ' And while the disclosures offer examples of what the costs might be for having a baby and treating diabetics, the last page of the document advises 'you can't use the examples to estimate costs for an actual condition.'' I guess the point is to show the price of care does vary, but you still won't know what you will have to pay until after you get sick and have already received needed care.
Problem #3:' Without full disclosure and easy access to the price of insurance and health care services, we have bought a pig, a live one, but have no way to control.