Decoding Your Health Insurance: The New Summary of Benefits and Coverage
A report from Families USA, May 2012
Note: This report contains data for all states and the District of Columbia.
Introduction
Consumers need clear information about the benefits provided by their health insurance plans—what’s covered, what isn’t covered, and what costs they’re responsible for. Yet research has found that consumers have significant difficulty understanding health insurance plans. This has a direct impact on consumers’ health: Without a clear understanding of what their insurance covers, consumers are more likely to delay or forgo care, to make uninformed choices about treatment, and to end up with large and unexpected bills. That will change beginning on September 23, 2012, when the Affordable Care Act will, for the first time, give consumers the right to concise, comparable, plain-language descriptions of the benefits and costs under private health insurance plans. This information will be provided in the new Summary of Benefits and Coverage.
The Summary of Benefits and Coverage will help the nearly 173.5 million people (65.1 percent of non-elderly Americans) who have private health insurance. It will help them decode the terms and conditions of their coverage and make informed health care decisions, regardless of whether they get their health insurance through a job or purchase coverage in the individual insurance market. To find out how many people with private insurance will be helped at the state level, Families USA analyzed data from the U.S. Census Bureau’s Current Population Survey (CPS).
The Summary of Benefits and Coverage will also bring transparency to the health insurance marketplace. It will help consumers understand their coverage once enrolled, but these new descriptions will also be a tremendous asset to consumers who are choosing among different health insurance plans. By providing standardized information, these summaries will allow consumers who are shopping for coverage to make apples-to-apples comparisons among plans and to choose plans that meet their needs based on value, rather than based on cost alone.
It is no surprise that the ability to compare plans will help consumers who are shopping for insurance in the individual market, but few may realize that it is also important for the large number of workers who must choose among different plans offered by their employer. To find out just how many consumers work for companies that offer a choice of health insurance plans, Families USA analyzed Medical Expenditure Panel Survey (MEPS) data on the health insurance choices offered by private-sector employers. We found that 71.1 million workers, or 65.6 percent of all workers, are employed by companies that offer a choice of plans. These 71.1 million workers and many of their dependents will now not only be able to understand the terms of the health insurance they choose, but they will also be able to make informed decisions about selecting those plans in the first place.
