Regulation frustration

Insurers seek time on simplified plan summaries

Later this year, health plans will be required for the first time to provide consumers with nationally standardized descriptions of the benefits and coverage they provide. The industry’s largest trade group said it will be no easy task.

The disclosures, required under the Patient Protection and Affordable Care Act, are outlined in final regulations the Obama administration issued last week. The rule is intended to give consumers plain-language and comparable explanations as they choose among plans. HHS officials said health insurers have used marketing materials to obfuscate important details.

The regulations prescribe a summary of benefits and coverage, as well as a glossary defining the terms used in the description, for plans that begin after Sept. 22. “Markets work best when people have the informa- tion they need to make informed decisions,” Marilyn Tavenner, acting administrator of the CMS, said in a call with reporters.

The new rules, published jointly by HHS and the Labor and Treasury departments, also require each plan to illustrate its costs of coverage in the cases of childbirth and treatment for diabetes.

Karen Ignagni, president and CEO of America’s Health Insurance Plans, said in a statement that the administration made some improvements but that health plans need more time and flexibility.

“The final rule requires an almost complete overhaul and redesign of how information must be provided to consumers,” Ignagni said. She added that the short time frame “creates significant administrative challenges that will increase costs and result in duplication because many plans are already developing materials for employers whose policies take effect Oct. 1, 2012.” AHIP estimates that complying with the rule will cost insurers $188 million in the first year and $194 million every year after that.

The revised regulations dropped a requirement that the summaries describe the likely costs to enrollees for breast cancer treatment. Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at CMS, said the change reflects concerns that breast cancer treatment is more complex and less-standardized than care for routine births and diabetes.

The regulations specify that the examples are not meant to provide the exact price for such cases, but rather “a vehicle to compare how different conditions and treatment scenarios would fair under different health plans, Larsen said.

Another provision dropped in the final rule is an absolute mandate that insurers provide all of the required information in only four pages. They will be allowed to enlarge the disclosure beyond four pages if they make a good faith effort to first meet that limit, Larsen said.