Insurers would have to provide cost information to consumers who requested it before they bought health insurance, according to the Department of Health and Human Services. The proposed changes are part of the new federal health care law.
"It's providing better information upfront," says Sandy Praeger, Kansas insurance commissioner. "This will be really important when the exchanges come out if you want to make side-by-side comparisons."
The regulations would require insurance companies to present information in a standardized format. One section answers questions — for example, "What is the premium?" or "What is the deductible?" — with the price and an explanation of the term.
Then, the new form breaks things down further: by cost for a primary visit for an illness or injury, for medications, for tests, for surgeries and for emergency-room visits.
Finally, it gives three coverage examples, so people can better understand what they may be required to pay for when they have a baby, need breast cancer treatment or manage diabetes.
The government worked with the National Association of Insurance Commissioners and several public advocacy groups to create the rules. If enacted, they would apply after March 23.
"This is actually a piece of the health care law we haven't been giving as much attention to because they're doing such an excellent job," says Carmen Balber of Consumer Watchdog. She expects it to make decision-making easier for consumers and says the insurers had no incentive to standardize the forms before because that would allow consumers to compare across plans.
"Companies compete with each other, and this does level the playing field a little bit," Praeger says. "Absent the rule to tell them what to do, (the insurers) are going to do what suits their needs."
Consumers often complain about confusing forms, Praeger says.
"Sometimes a policy will tell you how much a hospital stay costs, and then several pages later, in very tiny print, it tells you there's a 10-day limit or costs that aren't included," she says. Studies have shown that some consumers who don't pay their bills did not understand how much a procedure would cost.
Insurers haven't complained, Praeger says, because they knew the changes were coming.
"They just need to have enough advanced warning, which I think they will; they're making changes to forms all the time," she says.
The regulations were supposed to come out last year, so insurers should have more time, says Rob Zirkelbach, a spokesman for America's Health Insurance Plans.
"It's not feasible to implement it by March," he says.
Employers provide benefits packages to employees, so AHIP is concerned that they will have to explain a different package to each employee or will have to try to determine how much of the premium is an employee's responsibility, Zirkelbach says.
Unlike making the determination to take money out of a person's paycheck, he says, having to provide that information before a person buys a policy could be "burdensome." The new rules could increase administrative costs and therefore cause insurance costs to go up, he says.
