Late last week, the Departments of Health & Human Services (HHS), Labor and Treasury released a Frequently Asked Questions (FAQ) document on the Summary of Benefits and Coverage (SBC), the new, consumer friendly health insurance summary established by the Affordable Care Act.
Consumers will see the SBC for the first time when they shop for coverage or renew their coverage beginning in late September. Over 150 million consumers are expected to benefit from this form – everyone in private coverage, plus state and local government employees with employer-based coverage. In consumer testing, consumers found the new form easier to use than traditional health plan materials.
There are four elements of the FAQ worth highlighting:
First off, we’ve heard that some insurers and large employers were strongly urging policymakers to delay or weaken the SBC. However the Administration kept the September 2012 start date for this important new tool, preserving a major victory for consumers.
Second, insurers will not have to provide the form to their “closed blocks of business” – policies that can be renewed but are no longer sold to new customers – until late 2013. Unfortunately, it’s unclear how many consumers are affected by this rule. The rationale is that many consumers in these policies can’t actively “shop” for coverage due to pre-existing medical conditions that cause other insurers to turn them down. But in a few “guaranteed issue” states insurers aren’t allowed to deny coverage because of your health status and furthermore, the SBC is important for all consumers because it helps them understand the coverage they currently have, even if they aren’t comparison shopping. ConsumersUnionbelieves insurers should estimate the number of affected consumers and provide the form to these policyholders on a voluntary basis.
Third, if an employer provides coverage using more than one vendor – for example “carving out” prescription drug or “mental health” coverage to a second insurer – consumers may see more than one SBC. This may cause consumer confusion because one of their forms may say “prescription drugs not covered” while the other describes the prescription drug coverage that is available. Fortunately, this will only last for one year. Starting in late 2013, a plan administrator that uses insurance products provided by separate insurance companies must combine the information into a single SBC.
Fourth, the Departments will develop a temporary calculator that insurance companies can use to complete the “Coverage Examples” section of the SBC for the first year. Coverage examples, a much-liked feature of the summary, show consumers what the plan would pay for a specific medical scenario such as maternity or diabetes care. But the FAQ described this forthcoming calculator, as “streamlined” and hence “less accurate.” Consumers need the most exact information possible for Coverage Examples to be useful therefore we strongly urge health insurers to provide the most accurate coverage estimates possible, and avoid using the less accurate calculator estimate.
Just think — if insurers are having difficulty calculating patient and plan shares of the cost for a specific medical scenario, how much more difficult is it for the consumer?
Access to a uniform method of viewing and comparing health plan features is a tremendous breakthrough for consumers. We hope that insurers and employers will minimize the potential consumer downsides to these new temporary accommodations included in the FAQ. We welcome the fact that the majority of consumers will benefit from the timely roll out of the SBC form this year, allowing us to gain critical experience with the form before the large expansion in health insurance shopping in late 2013.