HHS Issues New Rules Requiring Insurers to use Plain Language to Help Consumers Compare Insurance Plans

Have you ever had to shop for insurance on your own and faced a bewildering array of options? With insurance companies peppering their plan descriptions with technical language and legalese, so you’re not quite sure what’s really covered? Or even worse, have you ever thought you were buying a good policy only to find out later you’ve been paying premiums for coverage that’s not there when you need it? This happens to countless Americans every day, but, thanks to new rules issued yesterday by the Obama Administration, should soon become a thing of the past. For the first time, all health plans – both individual market plans and employer-based plans – will have to give all consumers short, easy-to-understand summaries of the benefits and cost-sharing under their plan, as well as any limitations or exclusions under the plan.

Starting in September, Americans will no longer have to plough through hundreds of pages of dense, 10-point font text to understand what’s really covered by their policy. The information they need will be contained in a 4 page “summary of benefits and coverage,” provided by the plan before they’re enrolled. People will be able to easily make comparisons among health plan options and make the choice that’s right for themselves and their family. It’s no wonder that a recent Kaiser Family Foundation tracking poll found this to be the most popular provision of the ACA, viewed favorably by 84 percent of respondents. For more detail on this new rule, please read the Health Affairs blog entry co-authored with my Georgetown colleague, Mila Kofman.