Demystifying Health Insurance Shopping for Consumers

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By Consumers Union on Wednesday, February 13th, 2013

Covered California, California’s new marketplace that will transform the way consumers shop for affordable health insurance, announced bold action at a press conference today featuring Covered California’s Executive Director Peter Lee and Consumer Reports’ President Jim Guest  The event announced how Covered California will transform one of a consumer’s most dreaded tasks—shopping for health insurance—into a manageable, even satisfying, experience.

Consumers Union, the policy and advocacy arm of nonprofit Consumer Reports, has been intensively involved in helping Covered California as it sprints toward enrolling millions of Californians in health coverage starting in October 2013.

One of the things we pride ourselves on is translating complex data into simple, standardized information for easy apples-to-apples comparisons. Consumer Reports is grounded in the importance of standardized information to enable consumers to make the wisest choices and get the best value for their families’ needs.

There is nothing simple about health insurance—from jargon that few can understand to figuring out how much a given medical procedure with multiple doctors will really cost and how much a given plan will cover, it’s no wonder shopping for health insurance is frustrating for consumers. Nowhere is this more apparent than in the Wild West of health insurance: the market for individuals without employer coverage.

The Affordable Care Act has begun to change that by banning lifetime limits, requiring free preventive care, and requiring states to establish uniform “essential health benefits.” These provisions of law will create some uniformity and thus take some of the guesswork out of comparing plans. These were all principles CU advocated strongly for in the debates over the Affordable Care Act in Congress in 2010.

But the remaining frontier is making sure consumers know the true cost of individual policies, including the ever-confusing cost-sharing. In putting forward simplified, standardized benefit designs at today’s event, Covered California takes major strides into that last frontier.

These new standardized designs use the “metal tier” designations of the Affordable Care Act, and further specify deductibles (if any), required co-pays for each service, and even break out coverage for specific conditions such as pregnancy. These uniform benefit designs will help consumers truly make accurate comparisons among plans andfigure out if a particular policy is affordable—especially important for low-moderate income families.

Of course, California will still need to work on improving health insurance literacy so that the public becomes more comfortable with insurance concepts and terms. But having the information available in the standardized products is a pre-requisite to developing consumer understanding.

Covered California’s leadership on this effort is a very significant step toward making shopping for health insurance informed and manageable.  We at Consumers Union want to congratulate Covered California in leading the way in transforming the healthcare marketplace and leading the nation, as California so often does.

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