User-friendly health plan summaries at risk

Yahoo News, By Ricardo Alonso-Zaldivar –

January 26, 2012: One of the most popular provisions of President Barack Obama’s health care overhaul — consumer-friendly summaries of what your insurance plan covers — suddenly seems to be at risk.

Consumer groups say it’s not Republican opposition they’re worried about, but a White House that doesn’t want to be seen, in an election year, as churning out costly new regulations.

At issue is the health care law’s requirement that insurance plans provide simple, standard summaries of coverage and costs to help consumers pick benefits that are right for them — a sort of “CliffsNotes” version of the cryptic jargon.

The rule is due to take effect in time for open enrollment season this fall and is undergoing final review by the White House. It would apply to all private and employer health plans, covering an estimated 180 million Americans.

But consumer advocates say they fear the administration may heed industry complaints that the regulation, as proposed last summer, is too costly, burdensome and intrusive.

“There is concern that the consumer protections we were hoping to see may not be in the final rule,” said Dr. LaShawn McIver, policy director for the American Diabetes Association. “Ultimately, we are looking for a consumer-friendly product that gives people the information they need about what levels of coverage they can expect.”

Her organization and four others — the American Cancer Society, the American Heart Association, AARP and Consumers Union — wrote Obama this week urging him not to water down the requirements.

“The information available to Americans today is wholly inadequate for consumers to choose and understand the insurance coverage options available to them,” their letter said.

Simple-to-understand health plan summaries are the most popular provision of the health care law, which otherwise continues to divide the public. That’s according to a poll last November by the nonpartisan Kaiser Family Foundation, which found the summaries garnered support from 84 percent of Americans, compared with 37 percent who viewed the overall law favorably.

Administration officials said they can’t comment on the specifics of regulations under review, but they sought to reassure the consumer groups, which were major backers of the health care law as it was being debated in Congress.

“Giving consumers the information they need and making the health care system more transparent is a top priority,” said Erin Shields, a spokeswoman for the Health and Human Services Department. “We’re confident the final rules … will meet that goal.”

A proposed template released by the department last summer included such basic details as information on premiums, deductibles and copays for doctor visits and hospitalizations. Such information is now generally the norm in health plan summaries that most companies voluntarily provide their employees during annual open enrollment.

But the federal template went further. It also included something fairly new — so-called “coverage examples” that give a ballpark estimate of the cost for a typical individual for three common health conditions: normal childbirth, treating breast cancer and managing diabetes. Because all health plans would have to follow the same rules in compiling the information, it would allow consumers to compare insurance in ways they can’t now.

Lynn Quincy, a senior policy analyst for Consumers Union, said the advocacy groups have learned that two of the coverage examples may be omitted in the final regulation, leaving only a comparison of maternity costs, at least at the outset. Additionally, the requirement for employer plans to provide the benefit summaries may be delayed or weakened.

“We are very concerned that compared to the proposed rule that was released in August, the final rule we are expecting shortly will be weakened,” she said. “That would be very bad for consumers.”

America’s Health Insurance Plans, a trade group representing the industry, has complained that the timeline for introducing the comparisons this year is unrealistic, and the initial cost would be three times what the government estimated, or $382 million for the first two years alone. That would drive up costs for employers and health plans, the industry said, at a time when many companies are struggling in a difficult economy.

The industry says simple summaries for consumers are not necessarily easy to produce, raising numerous issues that range from accurately boiling down complicated insurance options into a couple of written lines, to accommodating the coverage changes that employers make from year. Deadline pressure also adds to costs, requiring insurers to hire outside contractors to meet the federal timetable, the industry says. Allowing an additional 18 months would significantly reduce the cost.

In his State of the Union message Tuesday night, Obama demonstrated that he’s sensitive to criticism of government overreach through regulations. “There is no question that some regulations are outdated, unnecessary, or too costly,” the president said. “I’ve ordered every federal agency to eliminate rules that don’t make sense.”