Photo courtesy of The Economic Times
One of the consumer protections that President Obama cared about when designing the Affordable Care Act (ACA) was to require that all private health plans provide consumers with a short, easy-to-read Summary of Benefits and Coverage (SBC) form and a gossary so people can look up terms they don’t understand. As benign as this would seem, insurance lobbyists actually fought tooth-and-nail to get that provision taken out of the final bill.
Thankfully, they didn’t win and the provision was able to stay. Now the Obama administration is working on figuring out the actual logistics of this requirement and how to enforce it. Not surprisingly, the insurnace industry is once again pulling out the big guns to try and weaken this requirement. This time, by allowing them to exempt the vast majority of plans in New York (i.e. the insurance plans people get from work).
Now, one has to wonder, what about a simple SBC form would make the insurance industry feel so threatened as to compell them to launch a full-scale attack against it? I mean, don’t people have a right to know what their insurance actually covers, and at what amount, before they sign up? It only makes sense.
Well, not in the eyes of the insurance industry. Turns out, the less their customers know about what they are buying, the more money the insurance industry can make. For example, if your insurance tells you that it will cover 80% of your hospital inpatient visits and that you have to pay 20%, that may sound like a pretty good value. But, if they go a bit further and tell you that the average inpatient stay costs $20,000* and that would leave you with a $4,000 bill at the end of the day – on top of the $800 you already pay each month for your insurance – you might want to reconsider your choice of plans and go with a different company that offers a better deal. This is something your insurance company definitely does not want.
Yes, in the wise words of Schoolhouse Rock , knowledge really is power. In this case, it’s the power to choose the plan that best fits your needs, and to make sure that your plan actually keeps up its end of the bargain.
Thankfully, the insurance industry is not the only one paying attention to this issue. The Consumer’s Union, a HCFANY member organization, is one of several organizations who are demanding that the Obama Administration stand strong on this issue and require that all private health plans adhere to these rules.
HCFANY recently signed on to a letter that the Consumer’s Union sent to the White House, urging the Obama administration not to weaken these regulations. You can read the letter here.
We will be following this issue closely, and hope you will too. In the meantime, if you are interested in this topic, here are a few more bits of reading from around the web:
“The Profit of Keeping You Ignorant,” by Wendell Potter
“Health Insurers Would Make Consumers Pay for Better Information“, also by Wendell Potter. A few months old, but still relevant.
“Make Insurance Understandable,” a Politico opinion piece by Lynn Quincy
*This is a completely random number I picked for the purpose of showing an easy example. So, please don’t quote me on it.