Making Sense of Health Insurance Lingo

AUGUST 08, 2011
Laura Enderle, Associate Editor
A new tool promises to translate complex health insurance policies into simple terms that are easier for patients to understand.

"Why did my copay go up?" It’s a question most pharmacists dread, and one that isn’t easily answered—even by a trained health professional. Whether by design or circumstance, explaining the intricacies of copayments, deductibles, and out-of-pocket limits to sick, frustrated patients is a duty that, more often than not, falls on pharmacists’ shoulders.
A new tool may make the burden little easier to bear, according to a report by Consumers Union, the nonprofit publisher of Consumer Reports. Called the “Coverage Facts Label,” the proposed labels would translate detailed health plan information into plain, easy-to-understand language, similar to the way food packaging labels distill key nutrition facts. 
The labels could help insurers meet a condition of the Patient Protection and Affordable Care Act that requires insurers to explain their policies on a standardized form. Lynn Quincy, senior health policy analyst for Consumers Union and coauthor of the new report, said the form “allows consumers to compare health plans apples-to-apples and thus makes shopping for a plan easier.” 
The prototype labels she and colleagues tested explain common insurance terms and calculate bottom-line costs for patients in 3 common medical scenarios—having a baby, treating breast cancer, and treating diabetes. During the testing period, consumers offered constructive feedback, asking for fewer disclaimers, a better “glossary,” and additional health care scenarios that could be viewed online. 
The labels are a step in the right direction, but they still need refining. “Even with the Coverage Facts Label, many consumers will still need help understanding key elements of health plan descriptions,” said Quincy. “It’s clear that we need to continue developing and testing further adjustments to these disclosures to help consumers better understand health plan cost-sharing terms.” 

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