Buying health insurance through the state shopping exchanges was supposed to be a breeze — like buying an airline ticket from Travelocity. But it isn't, and the reason why has nothing to do with the technical glitches of HealthCare.gov. It has everything to do with health insurance itself, a complicated product most Americans have little experience buying. They have little experience because most get their coverage from employers' health plans, Medicare or Medicaid, all of which make most of the coverage decisions.
The designers of the Affordable Care Act knew they were asking consumers who would be eligible to buy insurance through an exchange to take on a tough task. To help them out, the law called for a consumer disclosure document that would allow apples-to-apples comparisons among insurance policies. Consumer advocates and insurance regulators spent months compromising and crafting a tool they thought would work. Enter the document called the Summary of Benefits and Coverage.
The advocates and regulators did a good job. For each policy a shopper considers, the summary of benefits document discloses the deductible, out-of-pocket maximums, co-pays and coinsurance. That's the percentage of a bill consumers must pay, and it can add up to a lot if they get sick. Because the slick marketing brochures insurance carriers hand out usually don't give the full story when it comes to coinsurance — that is, what services it applies to, and how it can vary if you use providers outside the insurer's network — the disclosure summary goes much further. Companies must now tell customers exactly what services are subject to a coinsurance amount.
Insurers are slapping high coinsurance on the most commonly used services like X-rays and diagnostic imaging, laboratory services, hospital outpatient care and treatment at urgent care centers. What consumers have to pay out-of-pocket for those services is a key variable when comparison shopping. The summary of benefits, which explains why these variables matter, also shows what certain illnesses like breast cancer and maternity care might cost someone who buys this policy.
When shoppers put these summaries side-by-side, it becomes clearer which policy is best for particular consumers given their tolerance for risk and trade-offs. For example, someone who wants to pay less up front with a low premium needs to know they are likely to pay high cost-sharing when they get sick.
There's one shortcoming. The law didn't require the summary to disclose the premium. It was assumed shoppers would find that out on their own. Still, because the coverage information has to be given in a uniform way by each carrier, these summaries have the potential to be a valuable piece of consumer information. The big hitch: Few consumers know about them.
In the drama over affordability and cheap premiums, these benefit summaries have gotten lost. Insurers are not required to give them. If a consumer asks for them, insurers must provide the documents, but how many know to ask? Some insurers may not go out of their way to make them available. Instead they present fragments of important information that may leave out crucial details.
I saw how useful these summaries of benefits documents can be. CoOpportunity Health, one of those new co-op insurance companies that will be operating in some states, presented one to a Nebraska woman who has been shopping for an exchange policy. The specs for each of the company's policies were presented on one page. She could quickly see that silver plans came with 30 percent coinsurance for laboratory services and gold plans came with 20. But because the premiums were given as a range, it was hard to make an actual comparison from this table alone.
The woman also looked at information from Blue Cross. There was a summary sheet, but it seemed less specific. For example, it didn't say what the coinsurance was for lab services. A more detailed description was supposed to be in another document. I didn't see it there either. I found it in a third document that I had to print from the website.
My takeaway based on this very limited sample: The summary of benefits and coverage information may be somewhere in all the materials a company provides. But it's still hard to wade through it and it appears to be far from uniform. As soon as the government fixes HealthCare.gov, perhaps its next task should be to investigate whether the carriers selling on the exchanges are making it easy or hard for consumers to obtain vital information about exactly what they are buying.