NAIC Summary of Health Plan Coverage Ready for Testing

Tucked somewhere in the behemoth Patient Protection and Affordable Care Act is a readability standard. No, it doesn’t apply to the act itself.

Instead, this standard will require that every health insurer and every group health plan provide a summary of benefits and coverage, or SBC, that is written not exactly in plain English but in a uniform format that will make comparisons across health plans a bit easier. The ACA also requires the development of coverage facts labels, which will illustrate how a health plan might cover treatment for all of the services needed for a certain health condition such as diabetes.

This is important because beginning in March 2012 anyone who applies for health insurance, or has insurance through an employer, will be handed this information packet to shop for benefits or to provide a clearer idea of how their existing benefits work.

The Department of Health and Human Services entrusted the development of the SBC to the National Association of Insurance Commissioners, a group of appointed or elected state government officials who regulate insurance companies in their individual states. In turn, NAIC named a consumer information subgroup of 21 state insurance regulators and 14 industry representatives, health policy wonks, and consumer advocates.

What the subcommittee developed has been likened to the nutrition labels that populate almost every food item in a grocery store. That’s a bit of stretch, though, unless we’re talking industrial sized cans and packages.

Including the coverage fact labels, the SBC runs six pages. It includes definitions for terms such as 'premiums' and 'deductibles,' and presents some what-ifs: If a health plan member visits a healthcare provider’s office to treat an injury, what will be the copay or coinsurance amounts? The numbers are specific to the member’s policy.