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Buying health insurance to become a little less nightmarish

Consumer Reports News: February 09, 2012 03:07 PM

As we were just saying yesterday, buying health insurance can be a frightening and baffling experience, especially for consumers who have to shop on their own instead of getting coverage through an employer group plan.

But starting later this year, every health plan is going to have to explain its benefits in a standard, consumer-friendly information label that will spell out exactly what’s covered, what is not, and how much of the bill you’ll have to pay. And you won’t have to wait until after you’ve signed up for the plan to see it.

This label is required by one of the many consumer-friendly provisions tucked away in the Affordable Care Act (aka Obamacare). The final rules on what the label will look like, and who has to provide it, issued today by the U.S. Department of Health and Human Services, survived intense efforts by large employers and the insurance industry to water them down, according to DeAnn Friedholm, director of health reform for Consumers Union, the advocacy arm of Consumer Reports.

“The final label is a huge win for consumers,” Friedholm said. “Insurers will no longer be able to hide the costly parts of their plans in fine print scattered around documents hundreds of pages long.”

For instance, the new label (here’s a sample) will require plans to spell out exactly what does and doesn’t apply towards the deductible, something that, trust us, can be almost impossible to figure out today. If the plan doesn’t cover something important, like drugs or maternity care, you’ll be able to see that easily, too.

The label will be required for any plan that goes into effect after Sept. 23, 2012, in time to help employees with fall open enrollment choose their coverage for next year.

People buying in the individual market will also be able to see the label when they look up plans available in their geographic region on the invaluable insurance finder tool on, HHS’s consumer site. They’ll also get a fresh copy in advance of their annual renewal date, and can request a copy at any time.

The label will not, however, be available to people buying any kind of Medicare plan, including private Medicare Advantage or Medicare supplement (Medigap) plans, which aren’t subject to this portion of the health reform law.

One of our quibbles with the new rules has to do with a part of the label that our own consumer testing showed was the most helpful. These are the “coverage scenarios,” which show what the plan would pay for care of several standardized health conditions. The original version of the form had three such scenarios: having a baby, treating type 2 diabetes for a year, and treating breast cancer.

“These scenarios are great because they do the math for you, so you can instantly see whether one plan’s coverage will be skimpier than another one,” Friedholm said.

The final rule omitted the breast cancer example, which is too bad because it was the most costly treatment and thus best able to highlight plans with big gaps. HHS officials, however, said they were planning to identify some other costly standard scenarios to add later.

Nancy Metcalf

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