Summaries of Benefits and Coverage: Simplifying Shopping for Health Insurance

As of September 23, the “wild west” of shopping for health insurance coverage has been at least partially tamed, thanks to the Affordable Care Act (ACA). Consumers can now get standardized, simplified summaries of benefits and coverage (SBC) that will help them understand what’s covered by an insurance policy and allow them to make apples-to-apples comparisons among plan options. These summaries are modeled on the labels we use to compare ingredients in our food, and are designed to be easy to read, with medical and insurance terms that are defined in a standard, easy-to-understand way. According to public opinion tracking polls by the Kaiser Family Foundation, this provision is one of the most popular provisions in the ACA.

For me, these forms are the culmination of hundreds of hours of effort as part of a statutory working group tasked with developing the templates for these forms. Put together by the National Association of Insurance Commissioners (NAIC), the working group represented state insurance regulators, consumers, insurance companies, health care providers and insurance brokers. We spent over a year working through the content and format of the form, and the Obama Administration adopted our recommendations with very few changes.

The U.S. Department of Health and Human Services (HHS) notes the following important details about the SBC:

• The provision applies to ALL health plans, whether you get coverage through your employer or purchase it directly, starting September 23, 2012.
• Insurers need to provide the SBC to consumers at the time they apply for coverage, and to enrollees upon renewal.
• The form includes coverage scenarios for two common situations: normal delivery of a baby and treating type 2 diabetes. These scenarios can give interested consumers an approximate picture of their future out of pocket costs under the policy.
• Non-English speakers can request the SBC in their native language – insurers are required to translate the form into common languages such as Spanish and, in some states, Chinese, Tagalog and Navajo.

Consumers’ Union has provided a very helpful “explainer” on the SBC, you can check it out here. Going forward, it will be interesting to see how accessible the forms truly are for consumers, and whether and how consumers use them to shop for insurance. I’m hopeful these forms can help empower consumers with better information so they can make better decisions about what coverage is best for themselves and their families.

For information on developments like this—and much more—be sure to check in with CHIRblog‘s series on “Implementing the ACA.” 

Sabrina Corlette
Georgetown University Center on Health Insurance Reforms

(This blog was originally posted on the Center on Health Insurance Reforms blog site here )