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Comparison Shopping for Health Insurance

By Lisa Zamosky

Insurance Paperwork

Starting later this month, consumers will have access to a new tool that aims to make comparing and purchasing a health insurance plan a little easier.

Under a provision of the Affordable Care Act, both insurance companies and employers who offer health benefits to their workers must provide a Summary of Benefits and Coverage, or an SBC, starting September 23, 2012.

A tool of this kind is a first in the world of health insurance, the details of which are notoriously difficult to understand. Here are some of the health plan details you can expect to find on an SBC:

  • The services covered by a plan
  • Cost information, including deductibles, co-pays, and co-insurance
  • Doctors and hospitals participating in the health plan’s network
  • Prescription drugs covered by the plan
  • Enrollees’ right to appeal health plan decisions
  • A glossary of common health insurance terms

A neat feature that’s also included in the SBC is a comparison tool, which is modeled after the nutrition labels found on food packaging that show the number of calories and grams of sugar and fat, among other details, in a particular item of food.

The comparison tool will show the out-of-pocket costs consumers can expect to pay for two common medical scenarios – type 2 diabetes and having a baby.

 

Insurance Comparison

 

Putting SBC to work

According to a report by consumer advocacy group, Families USA, consumers with a choice of health plans — almost 19 million people who buy insurance on the individual insurance market and 71 million who receive health benefits through an employer offering more than one type of plan — will find this tool especially helpful in making an “apples-to-apples” comparison of multiple health insurance plans.

If you buy insurance on your own, the SBC will be made available to you by your insurer. For those who get health benefits at work, it will come through your employer during open enrollment, which is just around the corner for most companies nationwide.

The coverage examples, it’s important to state, are just that…examples. You’ll notice the comparison tool states that consumers should use these as a guide to understanding the kind of financial protection they’re likely to gain from each health plan being considered.

Relying on these examples as absolute projections of what you can expect to spend will no doubt be a mistake. The need to understand and follow the rules of your plan remains as important as ever to avoid sticker shock after receiving medical care.

Helpful or not so much?

How challenging has it been for you in the past to compare one health plan to another and determine which will best meet your medical needs?

Do you view this tool as a major sea change and something that will help you when it’s time to choose your next health plan?

Share your thoughts and opinions about the requirement of insurers and employers to offer this comparison tool in the comments section below.

Photo: Photodisc

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