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Blues: Consumers no speak no PPACA-ese

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More than half of consumers think they really need to know what a health plan drug formulary is, and what, roughly, minimum essential coverage means.

But, in the real world, fewer than half of consumers say they understand those terms, according to analysts at the BlueCross BlueShield Association.

Fewer than a quarter of consumers say they understand other common terms, such as “minimum essential coverage exemption,” the analysts say.

“There is, in some cases, a significant gap between the consumer’s desire to know and the actual understanding of insurance terms,” the analysts warn.

The analysts dissect consumer confusion in a report prepared for regulators at the National Association of Insurance Commissioners (NAIC).

The Consumer Information Subgroup, part of the NAIC wants to help the U.S. Department of Health and Human Services (HHS) revise the rules for the Summary of Benefits and Coverage (SBC) notices and the Uniform Glossary.

See also: 4 ways the PPACA benefits summary regs could affect your clients

Agents and brokers may be able to use the report to improve their own consumer communications. 

Drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) added the SBC and glossary requirements to the law to help consumers understand how health insurance works and how to shop for health coverage.

In practice, regulators and consumer group representatives say many consumers find the SBCs confusing. Insurers say they have a hard time squeezing the required information into the SBC template.

See also: Groups want kids on the health plan carton label

NAIC leaders want to send an SBC and glossary revision proposal to HHS as quickly as possible. The Consumer Information Subgroup’s parent, the Health Insurance and Managed Care Committee, could approve the subgroup’s report on the revision project Aug. 16, in Chicago, at the NAIC’s summer national meeting.

The BlueCross BlueShield Association, the insurer group that controls the Blue Cross and Blue Shield trademarks, had marketing analysts get 355 consumers to mark up an SBC image, and 360 consumers to talk about their understanding of health insurance terms.

See also: PPACA World dictionary expands

Survey workers gave participants a list of 30 medical terms from the SBC glossary. The workers asked the participants, “How confident are you that you understand the term?” and “How likely are you to NEED to understand the term?”

Most consumers said they were confident they understood terms such as “diagnostic test,” “emergency medical transportation” and “preauthorization.”

But consumers may have found some terms too confusing even to identify the terms as confusing. ”UCR,” or “usual, customary and reasonable” ranked as only the 11th most confusing term, for example. UCR came in far below “formulary” and “premium tax credits.” But insurers and providers have waged bitter court battles over what UCR really means.

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