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Plan 'carton label' changes could make pre-deductible benefits shine

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State insurance regulators could help change the official health plan brochures in a way that would make consumers more aware of the benefits plans offer before enrollees meet their deductibles.

Members of the Consumer Information Subgroup, part of the National Association of Insurance Commissioners (NAIC), have included that idea in a preliminary draft of a proposed revision of the Summary of Benefits and Coverage (SBC) notice.

The SBC is supposed to be a clear, standardized “milk carton label” for health plans.

If the federal government adopts the NAIC subgroup’s current SBC revision proposal as is, every U.S. health plan would have to put answers to a list of “Important Questions” near the start of its SBC.

The first question would be, “What is the overall deductible?”

The second question would be, “Are there services covered before you meet your deductible?” The insurer would have to give a brief description of any pre-deductible covered services, and then explain, “Why This Matters.”

The version of the SBC now in use does not include a clear, standardized description of the benefits enrollees get before they meet their deductibles.

The insurer would then go on to answer questions such as, “Are there deductibles for other specific services?” and “What is not included in the out-of-pocket limit?”

Drafters of the Patient Protection and Affordable Care Act (PPACA) created the SBC in an effort to create clear, standardized plan benefits descriptions that consumers could use to compare plan benefits on an apples-to-apples basis.

In theory, the SBC concept has been wildly popular. When a Henry J. Kaiser Family Foundation survey team described the SBC concept to voters, without saying SBCs were part of PPACA, 76 percent of Republican voters who participated said they liked the SBC concept.

In the real world, however, insurers and consumer groups have agreed that SBCs have been too hard for consumers to understand, and much less used than expected.

An SBC is supposed to take up only eight 8.5-inch by 11-inch pages. Insurers have complained that squeezing all of the required information into four sheets of paper is difficult.

The Consumer Information Subgroup has been trying to help the “tri-agencies”— the U.S. Department of Health and Human Services (HHS), the U.S. Treasury Department and the U.S. Labor Department — develop a better SBC.

See also: Feds: 2016 SBC rules are coming ‘in the near future’

The subgroup is also trying to help the tri-agencies update the standardized glossary that’s supposed to accompany the SBC.

The subgroup says it might be nice to have the NAIC create a glossary website for all SBC users.

“This eliminates any need for issuers to customize this piece of the SBC and will be beneficial over time as consumers learn there is one gold standard location for this document,” drafters suggest in a note to the tri-agencies included in draft SBC revision instructions

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