Get Ready To Read Those Labels!

Good idea, but most people still won't know the difference between a deductible and co-insurance and what applies to each.
 
While I commend them on tackling a difficult task, I see several problems already. One of the biggest issues is that they use "coverage examples" that are skewed to miss the real costs that a person could pay under these plans when you consider copays and other services that don't go to the out-of-pocket maximum.

First, I'll document how they don't show the "out-of-pocket maximum" correctly, and then show how that flows to misleading "coverage examples" that they claim are the easy way to compare between two plans.
  • The sample benefit summary is clearly for a copay PPO plan. However, under "deductible" it says, "You must pay all the costs up to the deductible amount before this plan begins to pay for covered services you use." This isn't true if there are copays.
  • It also says "The out-of-pocket limit is the most you could pay during a coverage period (usually one year) for your share of the cost of covered services", which is not true as copays don't usually accumulate toward the out-of-pocket max. Granted, they could claim that this particular sample plan design includes copays in the out-of-pocket maximum, but it would still be misleading in their coverage examples (explained below). It's also not clear in this benefit summary if they included the deductible in the out-of-pocket max or not, and as we know, most insurance companies do NOT include the deductible in the out-of-pocket maximum.
  • Under the heading "What is not included in the out–of–pocket limit?" it responds, "Premiums, balance-billed charges, and health care this plan doesn’t cover," still not mentioning copays and other services that typically don't go to the out-of-pocket max. On the 2nd and 3rd pages it lists COPAYS for Dr. visits, Xray and blood tests, major imaging, prescriptions, mental health and eye exams, for instance, with no mention that they don't go toward the out-of-pocket max.
  • By the way, on page 5, the section "Services your plan does NOT cover" lists only 8 items, with the disclaimer, "This isn’t a complete list. Check your policy or plan document for other excluded services." Talk about misleading! That's the shortest exclusion list I've seen in a benefit summary.
Now, why is that important, whether they're using an unusual plan design that includes copays & deductibles in the out-of-pocket max or not? Clearly, because the benefit summary should describe most plans well and the consumer should know what does and does not accumulate toward the deductible and out-of-pocket maximum, but also because HHS has used 2 "coverage examples" as the easy way to compare two plans.
  • The two REQUIRED cost analysis or "coverage examples" are a normal maternity and diabetes. Since so many potential applicants are NOT females wanting to have a baby, one would think they could have required a different example than pregnancy. In fact, it would have been MUCH fairer to have 3 examples - the small claim (copay driven out-patient services), the medium claim (MRI, CT Scan, oupatient surgery and the like that doesn't meet the out-of-pocket max), and the large catastrophic level claim like cancer (that meets the out-of-pocket max but also has ongoing copays for Dr. visits, expensive prescriptions and repetitive testing). That would have been fairer. But with the 2 coverage examples they used, the total patient liability was less than the $2,500 out-of-pocket max for this sample plan. In that way, they still don't show which plan really has the greater coverage.
  • So, to top it off, on page 8 it says, "What does a Coverage Example show? For each treatment situation, the Coverage Example helps you see how deductibles, co-payments, and co-insurance can add up. It also helps you see what expenses might be left up to you to pay because the service or treatment isn’t covered or payment is limited." In the next column it says, "Can I use Coverage Examples to compare plans? Yes. When you look at the Summary of Benefits and Coverage for other plans, you’ll find the same Coverage Examples. When you compare plans, check the “Patient Pays” box in each example. The smaller that number, the more coverage the plan provides." Not true, and very misleading. The plan could have a $10,000 out-of-pocket maximum and these examples wouldn't show a different bottom line. In fact, a plan could be designed to appeal to the unlearned, with a very low $100 deductible and low premium, but yet with a $50,000 out-of-pocket max, large copays (like $500+) for MRI's CAT Scans and other major imaging, large tier 3 & 4 Rx copays, large copays or deductibles for outpatient surgery, emergency room, urgent care and other services, yet those copays wouldn't even show up in the "bottom line" of these 2 coverage examples because the services listed for pregnancy and diabetes doesn't mention any of these types of services, and the "bottom line" doesn't even reach the out-of-pocket maximum. Therefore, if you look at the "bottom line" of this shabby plan I just described as opposed to a well-drafted traditional comprehensive PPO plan with a $500 deductible, 80% coverage to $2,500 out-of-pocket max and a few low copays, the shabby plan would indicate it was higher coverage. A buyer would be misled into thinking it was better coverage. Heck, even NASE might look good in these examples!
This is a gargantuan task, for sure, but I think it's back to the drawing board for HHS. Too bad they're already a year late in unveiling it, but if an agent did this kind of analysis, they could lose their license.
 
damn Ann, u should post that on ur website, lol

HHS should hire Ann, maybe then they would get it right. She knows 10x more than they do, gee I wonder why. Experienced professional perhaps that looks our for her clients? What a novel thought.
 
With some further reading, apparently every carrier has to use the same form by Sept with using the same comparisons - one being costs associated with the birth of a child.

Personally, I think this is important - especially since most individual plans don't cover maternity. What we have is some agents simply choosing not to go over that benefit with client (carrier direct reps too? You betca) but most people buying these plans, especially young couples assume it's covered.

I go over maternity, or lack there of it, with every female client under 50. It's important.

It'll also be interesting to see how individual carriers choose to illustrate that. If it's not covered then nothing goes towards the OOP and no network discount.
 
Those of us writing MA plans are required to read the summary of benefits to our clients so that they completely understand the benefits. Of course, virtually none of us really do it.

Wonder if this nutritional chart for IFP will turn into the same thing.

All a client needs to say is that the agent didn't go over it with a fine tooth comb and we're toast.

Rick
 
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