Health insurers may soon have to hand out short, standardized health plan guides. The insurers want to give out fewer guides later; consumer groups want want insurers to distribute more guides, and squeeze in more details.
Consumer representatives at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo. — the people paid to speak up for consumers in NAIC proceedings — say, for example, that they would like to see the guides warn consumers about the possibility that they might have to pay for some hospital care out-of-pocket, even if they work hard to try to stay in-network.
The Employee Benefits Security Administration (EBSA) today posted 322 comments, including the comments from the NAIC consumer reps, on its website.
EBSA, an arm of the U.S. Department of Labor, has been working with the U.S. Department of Health and Human Services to develop Summary of Benefits and Coverage (SBC) requirements.
Regulators are developing the SBC requirements to implement Section 2715 of the Patient Protection and Affordable Care Act of 2010 (PPACA), which calls for the government to create a standardized health plan description document, to help consumers do a better job of shopping for coverage.
The concept is popular even with many Republicans who hate PPACA. Analysts at the Henry J. Kaiser Family Foundation, Menlo Park, Calif., recently surveyed Democrats and Republicans about PPACA and found when they asked about major PPACA provisions that the concept of requiring health insurers to provide standardized, easy-to-understand plan summaries had the support of 76% of the Republicans they polled.
Regulators want consumers to be able to use SBCs to compare plan provisions such as deductibles and co-payments, and also to help consumers compare what the total and itemized out-of-pocket costs might be for patients dealing with conditions such as pregnancy or diabetes
The proposed regulations would require group health plans and health insurers to start providing SBCs March 23, 2012.
Daniel Durham, an executive vice president at America’s Health Insurance Plans (AHIP), Washington, is asking regulators for an 18-month SBC deadline extension.
Regulators estimated implementing the regulations would cost private health insurers just $98 million altogether in 2011 and 2012 and $58 million in 2013.
AHIP believes that the first-year cost will be $188 million, that the cost of maintaining the SBCs will be $194 million per year, and that allowing an 18-month extension could reduce startup costs by 23%, Durham says.
AHIP also believes the current version of the form is suitable for coverage applicants and plan enrollees but not for shoppers, Durham says.
Plans would like to see regulators develop other, simpler forms aimed at individual, small group and large group shoppers, Durham says.
Janet Trautwein, the chief executive at the National Association of Health Underwriters (NAHU), Washington, participated in an SBC advisory group and says NAHU members support the SBC program goals.
Like the insurers, health agents and brokers would like to see regulators push back the date when insurers must provide SBCs 18 months, Trautwein says.
Trautwein notes that PPACA requires the regulators to have developed final SBC regulations by March 23, 2011. Given the fact that regulators have missed the PPACA SBC development guideline, it makes sense for the regulators to give employers and insurers more time to implement the SBC system, Trautwein says.
Trautwein also emphasizes that “written documentation cannot replace personalized services.”
“While NAHU recognizes the importance of providing all consumers with easy-to-understand written materials about their benefit options and coverage, we want to stress that this documentation can in no way replace the personal service, timely objective information, guidance and accountability that professionally trained and licensed agents and brokers deliver on a daily basis,” Trautwein says. “Professionally trained and licensed benefit specialists are proud of their role as consumer advocates who help to make health care and other financial protection understandable for millions of Americans.”
The NAIC consumer reps write in their letter that the benefits of creating a uniform, standard disclosure to supplement the existing summary plan documents (SPDs) would be great.
“Consumer confusion regarding health plan terms—particularly cost-sharing terms—is well documented,” the consumer reps say. “If consumers can’t understand the coverage offered by a plan, they can’t make an informed selection.”
The SPD and other summaries that insurers and employers provide today are not standardized and do not include the kinds of detailed coverage examples that the SBCs are supposed to provide, the reps say.
Some insurance industry commenters have asked regulators to free plans serving specific types of consumers, such as employees of large companies or college students in student plans, from the SBC requirements.
The NAIC consumer reps say they want to see the requirements be universal and apply to people in self-funded plans and plans sold outside the new exchanges to be created by PPACA as well as to people in insurance plans sold through exchanges.
” If the SBC is not provided to people in such plans, the protections Congress intended under Section 2715 of [PPACA] would be denied to most privately insured Americans,” the reps say.
The consumer reps note the consumer assistance programs hear many complaints from consumers who end up getting care from out-of-network providers, such as radiologists, even though they have received care from in-network hospitals.
In-network providers cannot normally bill patients for the “balance” between the full list price of the services delivered and the carrier’s negotiated rates.
In most states, out-of-network providers can bill patients for the balance, even though patients were not aware that they were going to receive care from out-of-network providers and might not have been able to find any in-network providers in certain specialties in in-network hospitals.
“The SBC provides an opportunity to address this common problem,” the consumer reps say.
The SBCs scertainly should say what state laws apply to the balance billing issue, and the coverage examples that show how coverage might work if, for example, a patient had surgery in an in-network hospital could show what the patient might really pay if the patient received care from a mix of in-network and unintentionally out-of-network providers, the reps say.
“We recommend a scenario involving an in-network ER visit, combined with an out-of-network ER physician, unless consumer testing shows another example would better meet this need,” the reps say.
Correction: An earlier version of this article described NAHU’s location incorrectly. NAHU has moved to Washington.