Progress is made on health insurance contract forms with proposed HHS rules!

Progress is made on health insurance forms with proposed HHS rules!

On August 17, 2011 the Department of Health and Human Services proposed new regulations to make insurance form terms clear and available before consumers must engage in the enrollment process.   

Fair Contracts encouraged this long overdue reform.  On June 17, 2010, representatives from Citizen Works’ Fair Contracts Project (Ralph Nader and Theresa Amato) spoke with Mr. Jay Angoff, then Director of the Office of Consumer Information and Insurance Oversight at HHS. 

We alerted the Office to how much trouble our Contracts Reform Team had in the fall of 2009 trying to obtain health insurance contracts directly from insurers.  We explained that without seeking to enroll, our volunteer lawyers could not get copies of the contracts of major insurers in several states nor did state regulators in some states necessarily even require the insurance contracts to be submitted such that they would be subject to a Freedom of Information Act request. 

Indeed, we came up empty even when we made a request to HHS.  We explained that “a volunteer lawyer with our organization made a Freedom of Information Act request to HHS on September 14, 2009; within 10 days, she received a letter stating ‘please be advised that DHHS does not maintain health insurance contract forms which originate from health insurance providers.’"  

Shortly thereafter, we followed up in writing to HHS’ Office of Consumer Information and Insurance Oversight to memorialize our two requests which were:

“(1) that the terms in the fine print of health insurance contracts be disclosed, i.e. made easily accessible to the public in advance of the underlying consumer transaction, and (2) that HHS take an active role in requiring the design of better health insurance contracts and more comprehensible disclosure, including the standardization and simplification of terms and definitions.” 

HHS consulted with numerous stakeholders, and pursuant to the health care legislation that passed last year, has proposed rules that would remedy these problems. 

In their August 17, 2011 press release HHS states:

The rules proposed today will enable consumers both to more easily understand the coverage they already have and, when purchasing new coverage, to make apples-to-apples comparisons of available options. Specifically, the proposed regulations would ensure consumers have access to two forms that will help them understand and evaluate their health insurance choices, including:

·        An easy to understand Summary of Benefits and Coverage; and

·        A uniform glossary of terms commonly used in health insurance coverage, such as “deductible” and “co-pay”.

All health plans and issuers will provide a Summary of Benefits and Coverage, along with a uniform glossary of terms, to shoppers and enrollees upon request and before they buy coverage. Often, health plans and issuers only provide selective details on the plan or policy before it’s purchased, giving consumers a limited understanding of what they are buying. The proposed rules give consumers straightforward, standardized information on their choices upfront, helping them understand the key features of the policy or plan and allowing them to make a more informed decision. The summary will use a uniform glossary to replace the jargon that makes it impossible to compare plans or figure out what is covered. Health plans and issuers must also provide notice at least 60 days before any significant modification is made in the plan or coverage during the plan or policy year.

To read the rest of the HHS press release and learn more:

To comment on the proposed rules, on or before October 21, 2011, visit: Summary of Benefits and Coverage and Uniform Glossary