Insurers and employers will have to spell out plainly the costs and benefits of the health plans they offer starting next year. The rule announced by U.S. health officials on Wednesday is designed to better inform people about health insurance choices with a standard label, which the Department of Health and Human Services likens to the kind on a cereal box.
Among other things, the label will tell customers their premium, deductible and out-of-pocket costs, and the costs associated with medical events and procedures, such as doctor visits and breast cancer treatments. Insurers must provide the information before a customer purchases a plan and when there are any changes.
"Today, many consumers don't have easy access to information in plain English to help them understand the differences in the coverage and benefits provided by different health plans," said HHS Secretary Kathleen Sebelius.
The rule, part of President Barack Obama's 2010 health care overhaul, pleases consumer groups, who have complained that the pages of fine print accompanying insurance plans are often confusing.
"By making the terms of health insurance plans easier to understand, consumers are less likely to find themselves in health plans that don't meet their needs," said Consumer Union senior health policy analyst Lynn Quincy.
Insurers are concerned that the administrative costs associated with the new label will raise the price of the plans themselves.
"The benefits of providing a new summary of coverage document must be balanced against the increased administrative burden and higher costs to consumers and employers," said Robert Zirkelbach, the spokesman for America's Health Insurance Plans, the industry's trade group.
Kim Holland, executive director of state affairs at Blue Cross Blue Shield Association, said insurers support people knowing what they are getting, but echoed that concern.
"The concern is we already have a body of law that tells us what we need to have," Holland said before the rule's release.
The six-page label follows the recommendations of a group formed by the National Association of Insurance Commissioners that included insurance companies, consumer groups and academics.
"At the end of the day, what NAIC recommended wasn't what everybody wanted, but it was as close to a consensus as possible," said Sabrina Corlette, an NAIC consumer representative and Georgetown University research professor.
"You wouldn't be comparing apples to oranges anymore," she said. "So it would make it much easier for families to make those decisions."
