(CNSNews.com) – A proposed federal health insurance regulation set to take effect next year requires insurers to provide consumers with explanatory summaries of their plans, but the insurance industry contends this could be costly to enrollees, and offer little benefit.
The new rule – part of the $1 trillion Patient Protection and Affordable Care Act, better known as Obamacare – was announced Wednesday by Donald Berwick, President Obama's recess appointee to be director of the Centers for Medicare and Medicaid Services.
Berwick has never been confirmed or subjected to a confirmation hearing by a Democrat-controlled Senate.
Specifically, the proposed regulations would ensure that consumers have access to two forms to help them understand and evaluate their health insurance choices.
One of the forms would be a four-page "easy to understand" summary of benefits and coverage made available to anyone purchasing or currently holding a health insurance policy. The other would include a "uniform glossary of terms" commonly used in health insurance coverage, such as "deductible" and "co-pay."
The proposed rule, drafted with the help of the National Association of Insurance Commissioners, is open for public comment until Oct. 21. The regulations are set to take effect on March 23, 2012.
“This is all grounded in the idea that the more informed a patient is, the better decision he or she can make,” said Donald Berwick.
“Insurance can sometimes be the most difficult part for people to understand. Many time people will make decisions on coverage and not understand what it means for them until they get sick or until their care is denied or until they face high out-of-pocket costs.”
Under the proposed rule, the summary of benefits would include “coverage examples,” similar to the nutrition facts on packaged foods. They would illustrate what proportion of care expenses a health insurance policy would cover for three common benefit scenarios – having a baby, treating breast cancer, and managing diabetes.
“To be sure this information makes it into consumers hands, insurers will have to provide these documents before you purchase insurance,” Berwick said later during a conference call with reporters. “In fact, if there are any changes in coverage, your health insurance is going to have to provide notice of these changes at least 60 days before the changes take effect.”
But Robert Zirkelbach, press secretary for the industry group America’s Health Insurance Plans, argued that the proposed regulation could subject insurers and consumers to greater cost burden, with little benefit.
“The benefits of providing a new summary of coverage document must be balanced against the increased administrative burden and higher costs to consumers and employers,” Zirkelbach said in a statement.
“For example, since most large employers customize the benefit packages they provide to their employees, some health plans could be required to create tens of thousands of different versions of this new document – which would add administrative costs without meaningfully helping employees.”