What should health plan “nutrition labels” say about drugs?

Doctors and drug manufacturers want health plans to give consumers more information about drug coverage right up front.

The American Medical Association (AMA) and the Pharmaceutical Research and Manufacturers of America (PhRMA) are asking regulators to build more information about major medical plan drug coverage into the next revision of the Summary of Benefits and Coverage (SBC) and the Uniform Glossary.

The Consumer Information Subgroup, an arm of the National Association of Insurance Commissioners (NAIC), has published copies of letters from the AMA and PhRMA along with other SBC and Uniform Glossary comment letters on its section of the NAIC’s website.

Drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) created the SBC in an effort to help consumers, employers, researchers and others compare health plans on an apples-to-apples basis. Every plan is supposed to provide SBCs in the same standardized format. Some have described the SBC as being similar to the nutrition labels that dairies put on milk cartons.

PPACA drafters hoped the Uniform Glossary would be a short, easy-to-understand guide that consumers could use to make sense of the information in the SBCs. The current version includes definitions of everything from “provider” to “reconstructive surgery.” The current version also includes a definition of “formulary,” or the list of drugs that a health plan covers. 

Originally, the U.S. Department of Health and Human Services (HHS) and other federal departments were hoping to get an updated SBC into use in 2016. Health insurers and others said the industry needs more time to develop, test and implement new consumer materials. Regulators decided to put off updating the materials until 2017,

The Blue Cross and Blue Shield Association told members of the NAIC’s Consumer Information Subgroup that they would like the SBCs to be more flexible and easier to understand, and that they want to see any template revisions as quickly as possible.

America’s Health Insurance Plans (AHIP) also said the SBC ought to be more flexible, and not so tightly fitted to suit the two-tiered, in-network and out-of-network coverage, preferred provider organization plans that now dominate the market.

Both AHIP and the people who officially represent consumer interests in NAIC proceedings said they would like to see more consumer testing. AHIP wants more information about how consumers really shop for coverage, such as whether consumers rely heavily on SBC examples illustrating how coverage might work in specific health care scenarios.

The consumer reps suggested bringing in professional designers to make the SBC easier for consumers to understand.

The AMA and, especially, PhRMA, talked about how revising the SBC might affect a major PPACA consumer protection controversy: concerns that many consumers who are taking specific medications have trouble determining whether plans will cover their medications.

For a look at what the AMA and PhRMA commenters said about the SBC and Uniform Glossary components related to prescription drug coverage, read on. 

1. The AMA wants SBCs to state whether the plan’s out-of-pocket cost limit includes a patient’s prescription drug costs. 

PhRMA representatives also want to see the SBCs give clearer information about the interaction between PPACA out-of-pocket cost limits and prescription drug costs.

Issuers are using several different methods toward counting drug costs toward deductibles, the PhRMA reps say.