Standardized insurance summaries required next year

Just as food companies supply food nutrition labels, health insurers must provide existing and potential customers a standardized summary of their plans' costs and benefits starting March of next year.

The Department of Health & Human Services (HHS) issued a proposed rule on the so-called insurance labels, which would require insurers to provide the summary on request, before consumers enroll, and 30 days before consumers renew their plan. Insurers also must notify their members of any significant coverage changes at least 60 days before those modifications are effective, according to the Washington Post

These summaries must include a plan's overall premiums, co-pays, and co-insurance amounts, as well as expenses covered for having a baby, treating breast cancer, and managing diabetes. Insurers also must provide a glossary with standard, government-approved definitions of insurance industry terms like "deductible" and "co-payment." However, HHS doesn't want the summaries to be longer than four double-sided pages printed in 12-point type, the New York Times reports. 

Insurers can provide the plan labels by email, online, or on paper. HHS can fine insurers up to $1,000 for each policyholder to whom they fail to send the summary, notes the Times.

The insurance industry, led by America's Health Insurance Plans (AHIP), said the operational and administrative changes needed to create the summary documents make complying with the rule difficult, particularly by the compliance date of March 2012, Bloomberg reports. "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," said AHIP spokesperson Robert Zirkelbach.

HHS estimates that insurers' compliance costs, including updating computer systems and printing and sending out notices, will be $73 million for 2012, and then $58 million annually starting in 2013, notes Bloomberg.

To learn more:
- read the HHS proposed rule and example insurance label (.pdf)
- read the Bloomberg article
- check out the Washington Post article
- see the New York Times article

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