Feds require easy-to-understand health plan briefs for consumers

WASHINGTON -- Don't have the slightest clue what your health insurance covers?

The Obama administration says that's going to change. Officials announced Thursday that starting later this year private health plans will have to provide consumers with an easy-to-understand summary of what's covered, along with key cost details such as copays and deductibles.

Just six pages long. No fine print.

And because the summaries will use a single standard format, it will allow "apples to apples" comparisons among health plans that aren't possible now. That will help working spouses trying to pick between employer plans, as well as people who buy coverage directly from an insurance company.

"If an insurance plan offers substandard coverage in some area, they won't be able to hide it in dozens of pages of text," said Medicare chief Marilyn Tavenner, who also oversees implementation of President Barack Obama's health care law.

Insurers and business groups were unhappy, calling it another costly new regulation under the overhaul. Consumer groups said the new summaries won't be perfect, but called them a strong start. Employees should start seeing them during open enrollment season this fall.

One shortcoming is that the summaries won't include premiums. Administration officials said they ran into logistical problems trying to do that, and that premiums should be easily available anyway, either from their employer or directly from a health plan. Part of the problem with listing premiums is that insurers can currently charge more for the exact coverage to people in poor health.

Although the health system overhaul itself continues to divide the public, a major poll last year found that 84 percent of Americans support insurance summaries. The requirement takes effect Sept. 23 and applies to all private insurance, including employer coverage and plans purchased individually, affecting about 150 million to 180 million Americans.

Many big employers currently provide such information to workers during open enrollment. But the federal summary goes further. It requires something new -- so-called coverage examples that give a ballpark estimate of the cost of treatment for a typical individual for two common health conditions: normal childbirth and managing diabetes.

A preliminary version of the regulations also called for an example focusing on breast cancer. But Health and Human Services officials said that proved too complicated, since there are different approaches to treatment.

"We didn't take this off because (treatment) happens to be more expensive," said Steve Larsen, head of the Center for Consumer Information and Insurance Oversight. "It just needed more work."

In the future, up to six such coverage examples may be required, he said.

Advocates for cancer patients were disappointed.

"I'm a little surprised by that," said Stephen Finan, senior policy director at the American Cancer Society Cancer Action Network. "The example was based on a standardized regimen of treatment, and it's my understanding it was vetted by the National Cancer Institute. I don't understand why they decided to leave it out."

The administration appears to have taken arguments from both sides into consideration.

Insurers and employers had complained that providing paper copies of the summaries would be a huge new cost. The administration will allow them to comply by providing an online version, but consumers must be told that they can receive a paper copy promptly upon request.

Large employers had asked that the summaries be phased in over a longer period for them. But instead, they will have to comply this fall, for coverage that starts Jan. 1, 2013.

Business groups were not satisfied. "We don't like it, even though they have taken steps to make it a little more palatable," said Neil Trautwein, vice president of the National Retail Federation.

The insurance industry said it already provides user-friendly materials to consumers and having to adopt the new requirements will lead to duplication and increase costs.

Some wondered why the government doesn't practice what it preaches by providing a similar user-friendly summary for Medicare, the health care program for seniors and disabled people. Indeed, the "Medicare & You" booklet runs to nearly 150 pages. Larsen said Congress didn't think of that in the health care law.

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Online:

Template for health plan comparisons: http://tinyurl.com/7ang6gu