Health coverage 'fact labels' help alleviate consumer confusion

If you've ever tried to compare different health insurance plans — either as a small group or on your own — you know it can be an intimidating task. But starting next year, the law requires insurers to include so-called "coverage facts labels" on policies to help consumers better understand and compare health plans.

Earlier this year, Ellen Benavides took a job with the state of Minnesota. And with that job, came a choice of health plans.

"As a new state employee, I had the opportunity to go through our new health plan enrollment process [and] it was pretty daunting to understand," Benavides said.

Benavides is not your average consumer; she's the assistant commissioner for the Minnesota Department of Health and holds a master's degree in hospital and health care administration. That she found her plan options difficult to compare says a lot about the complexity of health insurance.

The federal health care law aims to take some of the guesswork out of choosing the best plan. Over the next few years, the legislation requires health insurers to provide key information about their policies in an easier to understand way.

The health care overhaul will bring tens of millions of uninsured people into health plans, many of whom don't have Benavides' education, or English is a second language. Benavides said it's critical everyone understand what they're choosing.

"As more and more people are going to be entering the insurance market and have coverage through the Affordable Care Act, there's a lot of people who haven't had the experience," she said.

Consumers should start to see new so-called "benefit summaries" for three medical conditions beginning next March: pregnancy, breast cancer and diabetes. The idea is to start with those conditions before adding other medical conditions by 2014. That year, consumers will be able to compare and purchase health insurance through online marketplaces known as exchanges.

Sabrina Corlette, research professor at Georgetown's Health Policy Institute, is part of a group representing health insurers, consumers, and state regulators that's developing several examples of benefit summaries.

Corlette said the goal is to provide consumers with enough information that they can compare policies side-by-side.

"Unlike a car or a TV, where you can go to the store and kick the tires a little bit, [for] health insurance you just can't get that kind of information about what you're really buying," Corlette said.

But creating sticker-prices for a health insurance policy is not as simple as listing gas mileage on a new Chevy. Consumers know what miles per gallon means; they're less likely to know the difference between a co-pay, co-insurance, or deductible — and how they affect the total cost of a plan.

"These things are hard because the underlying product is so complex," said Lynn Quincy, senior health policy analyst with Consumer's Union, the non-profit publisher of Consumer Reports. Consumer's Union has been holding citizen focus groups and interviewing individuals about how consumers might use these proposed labels.

Quincy said that health officials have to be aware that there are many different consumers out there with fairly low health insurance literacy levels.

"The potential for confusion is very high," Quincy said.

In the next several weeks, the federal government is expected to issue rules on what the coverage facts labels should contain.

MPR contacted a number of Minnesota health insurers who declined to comment until those rules are out.