December 16, 2010

No More Fine Print? Health Insurance Policies Set to Change

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Hartford may be the Insurance Capital of the World, but the state’s insurers have been no more transparent than their counterparts around the country in disclosing benefit and coverage provisions of health plans to consumers.

All that is set to change after action taken Thursday by the National Association of Insurance Commissioners, which approved standards by which insurance companies will be required to provide health-benefit information to consumers in plain, understandable language.

The change, which stems from a little-noticed mandate in the federal Patient Protection and Affordable Care Act, would go into effect by March 2012, once the U.S. Department of Health and Human Services signs off on it.

“It’s been kind of under-the-radar, but this is really a wonderful thing,” said Ellen Andrews, executive director of the non-profit Connecticut Health Policy Project, a consumer advocacy group that offers a helpline to answer questions and assist residents in accessing health care.  “We get calls all the time from people who think their policies cover certain things, and then find out they don’t.”

Andrews said the new standards are especially critical to ensuring that consumers can make “informed decisions” about health-insurance plans, once they are offered through a health insurance exchange, or competitive market created by healthcare reform.

Federal reform legislation directed the National Association of Insurance Commissioners to convene a group to develop a standardized form that insurers would use to explain benefits and coverage to consumers. Premiums, deductibles, in-network and out-of-network expenses, excluded services and other often-obscure provisions must be clearly explained.

The standards even go so far as to require insurers to print the materials in at least a “12-point” type size – eliminating the “fine print” common to policies today. Complicated jargon also would become off-limits.

“I have a PhD, and I still have to look up the language in some of these policies,” Andrews said.

In a letter to Health and Human Services Secretary Kathleen Sebelius, the subgroup of the National Association of Insurance Commissioners (NAIC) that drafted the standards, working with other healthcare representatives, said it had met for more than 120 hours this year.

“The Subgroup sought to create consumer friendly and linguistically and culturally appropriate definitions for each of the statutorily dictated terms,” the letter says. The draft benefits’ summary and glossary of definitions included in the insurance policy forms were tested on consumer and industry groups, with myriad changes made along the way in response to concerns raised, a NAIC spokeswoman said.

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