Proposed standard for health insurers released

The Obama administration and the Department of Health and Human Services (HHS) unveiled a new form that seeks to standardize the information provided by health insurers about the coverage they offer. The form is the next step in federal administration of the new health care reform law. Insurers would be required to fill out detailed information about what exactly their policies cover and how much they cost. This information would go into state health insurance exchanges so that consumers can compare policy offerings in their area in a standardized way.

HHS officials compared the form to nutrition labels on food products. In essence, all policies in the exchange would present the same types of information so that consumers can look across the same coverage points and see where policies differ. Insurance companies would have until March 2012 to provide information through this form on all of their policies. The deadline is designed to provide enough time for health insurance exchange administrators to pull the information into their websites and informational materials.

The use of a standard form will also get around state based disclosure requirements. Currently, each state has different disclosure requirements for health insurers, the form will supersede those laws and provide standardization nationwide.

The form also provides a glimpse into how federal health care reform will work in practice. States that have not created health insurance exchanges themselves by the 2014 deadline will have one created and administered for them by HHS. Forms like this provide a framework for how this will play out.

Several states have already been awarded federal grant money to develop their own exchange and the consumer process is now clearer. Consumers will be able to compare doctor visits and procedures based on the requirements of the form, the rules that go along with the form also explain that insurers will be required to provide a coverage summary on demand.

Health insurers are already panning the plan citing the customization of their policies and administrative costs associated with filling out the form. States and health insurers would also be required to provide a glossary of common terms in their policies so that consumers fully understand what they are reading.

The form was developed through a working group that included health care providers, insurers and was led by the National Association of Insurance Commissioners. The form and proposed rules for filling it out are subject to a 60-day comment period that started yesterday.