Filed Under:Health Insurance, Individual Health

Witness: SBCs justify value of insurance

Lynn Quincy (Senate Commerce Committee video screen capture)
Lynn Quincy (Senate Commerce Committee video screen capture)

Private health insurers generally were supportive when the U.S. Department of Health and Human Services (HHS) and other federal agencies were developing the new "Summary of Benefits and Coverage" (SBC) standards.

Now, the SBC program may be turning out to be an example of a Patient Protection and Affordable Care Act (PPACA) program that is helping insurers, by giving consumers more information than they usually get about how health insurance can help them.

Lynn Quincy, a health policy specialist at Consumers Union, talked about the effects of SBCs Wednesday during a hearing on health care and health insurance system transparency organized by the Senate Committee on Commerce, Science and Transportation.

The drafters of PPACA created the SBC program in an effort to help consumers and employers shop for health coverage on an apples-to-apples basis. As SBC is supposed to describe the features of an individual health policy or group plan and also provide detailed, standardized examples illustrating how the plan might work for an enrollee who had a baby or was facing diabetes.

Issuers of new individual policies had to start making SBCs available Sept. 23, 2012. For group plans, the SBC requirements took effect, or will took effect, during the first plan year that started, or will start, after Sept. 23, 2012.

Consumers Union survey teams started asking consumers about the SBCs in the fall, and early reviews look great, Quincy said.

Only half of the consumers surveyed who shopped for coverage in the fall could remember seeing an SBC, but the consumers who had seen SBCs ranked the SBCs as the most useful tools they had when they were shopping for coverage, Quincy said.

sbc

Consumers said they like the idea of being able to compare plans on an apples-to-apples basis, having a list of policy coverage exceptions gathered in one place, and having access to notes explaining why policy provisions such as deductibles and coinsurance rates matter, Quincy said.

But the survey team found that what consumers liked most were the standard coverage scenarios, such as descriptions of how a policy might cover having baby.

The SBC lists the retail cost of items such as radiology and anesthesia for someone, how much the insurer might pay and how much a consumer might pay out of pocket.

For many consumers, the "real life" scenario gives consumers the first clear explanation they've seen of what medical care might really cost, and, in some cases, the SBC  is the first document they've seen that clearly shows how much the insurer might pay for care as well as how much the plan enrollee might pay, Quincy said.

"It reminded them of the importance of insurance," Quincy said.

An early draft of the SBC included a breast cancer scenario, and that scenario was even more effective than the "having a baby" scenario or the diabetes scenario at illustrating the importance of health insurance, she said. 

"I told the health plans, 'This should be your marketing tool,'" Quincy said. "Drum up some business with these examples."

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