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  • Tales of the Red Tape #28: Simplifying Insurance a la Obamacare

    Obamacare requires health insurance companies to produce a summary of benefits and coverage (SBC) based on a government-imposed template and glossary. Below is a sampling of the requirements (70 pages) concocted by the Departments of Health and Human Services, Labor, and the Treasury to simplify the task.

    1. The summary of benefits and coverage “must be presented in a uniform format, cannot exceed four double-sided pages in length, and must not include print smaller than 12-point font.” It also must “replicate all symbols, formatting, bolding, and shading.”
    2. Plans and issuers must provide the summary of benefits and coverage in a “culturally and linguistically appropriate manner.” (The government’s template and glossary are available in “Spanish, Tagalog, Chinese, and Navajo.”)
    3. “The items shown on page 1 [of the template] must always appear on page 1, and the rows of the chart [in the template] must always appear in the same order. The chart starting on page 2 must always begin on page 2, and the rows shown in this chart must always appear in the same order. However, the chart rows shown on page 2 may extend to page 3 if space requires, and the chart rows on page 3 may extend to the beginning of page 4 if space requires. The Excluded Services and other Covered Services section may appear on page 3 or page 4, but must always immediately follow the chart starting on page 2. The Excluded Services and Other Covered Services section must be followed by the Your Rights to Continue Coverage section, the Your Grievance and Appeals Rights section, and the Coverage Examples section, in that order.”
    4. “The footer must appear at the bottom left of every page.”
    5. “The uniform glossary of health coverage and medical terms may not be modified by plans or issuers” (e.g., “Emergency Room Care” is to be defined as “Emergency services you get in an emergency room”; “Physician Services” is to be defined as “Health care services a licensed medical physician provides or coordinates”; and “Prescription Drugs” is to be defined as “Drugs and medications that by law require a prescription.” The glossary is intended to be educational in nature and the definitions may not be the same as definitions used by a plan or issuer.”)
    6. “Plans and issuers have the option to use their logo instead of typing in the company name if the logo includes the name of the entity sponsoring the plan or issuing the coverage.”
    7. In the “Answers” column for the question What Is The Overall Deductible? issuers must answer “$0” if there is no overall deductible. In the “Why This Matters” column for the same question, the following language must be used if there is no overall deductible: “See the chart starting on page 2 for your costs for services this plan covers.” In the “Answers” column for the question Are There Other Deductibles for Specific Services? the following statement must appear at the end of the list if the plan has more than three other deductibles and not all deductibles are shown: “There are other specific deductibles.” If the plan has fewer than three other deductibles, the following statement must appear at the end of the list: “There are no other specific deductibles.”
    8. “List placement must be in alphabetical order for each box. The lists must use bullets next to each item.”
    9. “Each plan or issuer must place all the following services in either the Services Your Plan Does Not Cover box or the Other Covered Services box according to the plan provisions…:
    • Acupuncture
    • Bariatric Surgery
    • Chiropractic Care
    • Cosmetic Surgery
    • Dental Care (Adult)
    • Hearing Aids
    • Infertility Treatment
    • Long-term Care
    • Non-emergency Care (when traveling outside the U.S.)
    • Private-duty Nursing
    • Routine Eye Care (Adult)
    • Routine Foot Care
    • Weight Loss Programs
    1. “[T]he Departments authorize the SBC to be provided either as a stand-alone document or in combination with other summary materials (for example, a summary plan description), if the SBC information is intact and prominently displayed at the beginning of the materials (such as immediately after the Table of Contents in a summary plan description). For health insurance coverage provided in the individual market, the SBC must be provided as a stand-alone document.”
    2. “The requirements to provide an SBC, notice of modification, and uniform glossary under PHS Act section 2715 and these final regulations apply for disclosures with respect to participants and beneficiaries who enroll or re-enroll in group health coverage through an open enrollment period (including re-enrollees and late enrollees), beginning on the first day of the first open enrollment period that begins on or after September 23, 2012. For disclosures to participants and beneficiaries who enroll in group health plan coverage other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees), the requirements under PHS Act section 2715 and these final regulations apply beginning on the first day of the first plan year that begins on or after September 23, 2012. For disclosures to plans, and to individuals and dependents in the individual market, these requirements apply to health insurance issuers beginning on September 23, 2012.”
    3. “Each plan or issuer must calculate and populate the Patient Pays total and sub-totals based upon the cost sharing and benefit features of the plan for which the document is being created. Each plan or issuer must calculate and populate the Plan Pays amount by subtracting the Patient Pays total from the Amount Owed to Providers total.”
    4. “The row for communicating premium information has been removed from the summary of benefits and coverage template document and the instructions for completing this section have also been removed.”

    The materials described in this guidance document are authorized by the departments for the first year of applicability only; the departments intend to issue updated materials for later years.

    The total 2012 burden estimate for issuers to produce the summary of benefits and coverage is 1,500,000 hours, with an equivalent cost of about $63,000,000 and a cost burden of $9,000,000 for a total of $72,000,000.

    Posted in Obamacare [slideshow_deploy]

    4 Responses to Tales of the Red Tape #28: Simplifying Insurance a la Obamacare

    1. Bobbie says:

      am I catching this right? time consuming and condescending having everything spelt out word for word? it's like "please wash your hands attached to your wrists and fingers attached to your hands and nails attached to your fingers, attached to your hands" "please dry hands after washing hands and dry fingers after washing with hands and dry nails attached to fingers after washing with fingers and hands." forget the "please." then government complicates it for the stupidity's sake of government hiding within limitless contentions and call it simple? always under government authority who admits it will change admits it's uncertainty regarding our personal health within government control where it wouldn't be if it was in our own! How is that expected reliable? or productive!? or beneficial? Wow! high paid, intentional brain narrowing of government jobs in position to make sure it's written and everything goes the way it's handled within government dumping their junk into our personal health care! How sad… threatening…

    2. Mike says:

      I work for the healthcare industry, and know that terminology and coverage options are very different across the industry. This is a good requirement, one that will allow people to view and compare insurance options quickly and easily. This protects consumers. Not all regulation is bad.

    3. Bobbie says:

      of course terminology and coverage options are important the layman understand. That's what private insurance does but for the control of government to define where it takes doctor's discretion is only complicating the patient's health and the system. This isn't protection for the sickly, it's protection for the government care provider. you are the result of government actions leading you to consequences of your matters put in government control. As long as government staff goes by the policies written, they are fully protected. The patient is the paycheck and taken an extreme advantage of.

      In health care, it's dangerous to the patient to put government policies that compromises communication, ethics, etiquette AND care and medicine outside the patients reach. What if you can't understand the medical staff? Or think you did? or they can't understand you? Or think they did? I've seen patients die because of mis, lack, no understanding. If something happens to you differently then the way the government health plan defines the happening and cause, you're not covered. In the free market how things happened are learned from, taken care of and used for future reference.

      The intrusions of stipulations and contentions brought on by the control of an abusive government force, isn't something people with the simplest of minds trust. Government regulation is good for government ONLY!

    4. DMJ says:

      This, from the bureaucracy that gave us the Income Tax code. How about the government simplify its tax code so everyone can understand it without reading it five times and then consulting a tax accountant?

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