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Reality collides with PPACA benefits summary length limit

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State insurance regulators are asking the Obama administration to be a little looser about the size of Summary of Benefits and Coverage (SBC) notices.

The SBC is supposed to be like a “milk carton nutrition label” for health plans that gives consumers and others basic, standardized, easy-to-compare information about a health plan’s features, such as deductibles, co-payment levels and annual maximum out-of-pocket spending limits.

When lawmakers included the law creating the SBC program in the Patient Protection and Affordable Care Act of 2010 (PPACA), they set a four-page size limit on each SBC.

Federal regulators eventually decided that “four pages” could mean both sides of four sheets of paper.

Now, members of the Consumer Information Subgroup, an arm of the Health Insurance and Managed Care Committee at the National Association of Insurance Commissioners (NAIC), have developed a letter and memo that call for the “tri agency” group in charge of administering PPACA — the U.S. Department of Health and Human Services (HHS), the Employee Benefits Security Administration (EBSA), and the Internal Revenue Service (IRS) — to bend the definition of “four pages” a little more.

The subgroup “unanimously and strongly recommends that the tri agencies interpret that statutory page limitation as applying to the ‘uniform template’ [for an SBC] and not to an SBC after it has been completed or issued by a plan issuer,” the subgroup says in a version of the memo posted on the NAIC website in connection with a subgroup conference call held Tuesday.

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

An insurance company or other plan provider needs to be able to provide enough information to achieve the purpose of the SBC, which is to “‘accurately describe… the benefits and coverage under the applicable plan or coverage,’” the subgroup says, quoting the language of PPACA.

But, in a version of a cover letter posted on the subgroup’s section of the NAIC website, NAIC officials say they still have concerns about SBCs giving consumers more information than they can understand, absorb or use.

“When text boxes are long and full of complex terms, consumers will avoid reading the information in its entirety,” officials say. “All regulators reviewing completed SBC forms must avoid the temptation to add more information simply because there is no page limitation.”

In related news, Susan Kleimann, a consultant who tested a proposed SBC revision for the subgroup, reported that focus group participants with low literacy said they liked the draft and wanted even more information.

The high literacy participants wanted to see a shorter version that focused on the specific features of a specific plan, with much less information about how health insurance works, Kleimann said.

See also: Blues: Consumers no speak no PPACA-ese