New Transparency Rules for Health Plans: A Huge Win for Consumers

Mila Kofman and Sabrina Corlette | Health Affairs Blog | February 10, 2012

How do you shop for health insurance today? For many of us, our employer makes the decision for us. And if there is a choice of health plans, the employer also provides helpful summaries of the benefits, premium differences, and cost-sharing so that we can compare plans easily and choose one that is right for us.

But for millions of Americans who don’t have job-based coverage, it is not so easy to make an informed choice when options are available. Because of differences in how coverage works, even different ways deductibles work, it is almost impossible to compare health insurance options. Even worse, rarely do two insurers use the same definition for the same terminology, leaving some consumers to make decisions in the dark.

On February 9, 2012, the Obama Administration released final rules on what the Kaiser Health Tracking Survey found to be the most popular provision under the Affordable Care Act (ACA) — known as “section 2715.” Akin to food labels that we use to compare ingredients in our food, section 2715 requires insurance companies and employers to provide people with an easy to understand 4-page summary of what a health insurance policy covers, what’s excluded, and cost information about deductibles, co-insurance, and copayments. The provision also requires insurance and medical terms to be defined in a standard, easy way.

Soon will be gone the days when a person needs a PH.D. in insurance law to understand how health insurance works...