Sen. Rockefeller, Reps. DeLauro, Schwartz Introduce Health Care Labeling Bill

Protects Families from Hidden Gaps in Coverage

Washington, D.C.—On the heels of a recently released report urging greater transparency and better tools to help consumers compare health coverage, U.S. Senator John D. (Jay) Rockefeller IV and Congresswomen Rosa DeLauro and Allyson Schwartz introduced legislation today to bring much-needed simplicity and key facts on health coverage to consumers through the creation of a "Coverage Facts" label for health care plans – similar to the "nutrition label" on packaged foods. A sample label is enclosed.

The Informed Consumer Choices in Health Care Act of 2009 will give consumers the information they need to make informed decisions about health care coverage through an easy to understand, uniform label. This legislation will streamline and simplify health insurance forms, standardize key health insurance definitions, and provide greater assistance to consumers navigating difficult health coverage decisions.

"We get more understandable information when we choose a box of cereal than we do when choosing our health insurance. This is unacceptable. One of the biggest obstacles in health care is making sure families get enough information to make informed decisions," said Senator Rockefeller, Chairman of the Senate Finance Subcommittee on Health Care, and Chairman of the Senate Commerce Committee. "This legislation puts the insurance industry on notice – Ingenix pricing schemes and the bait-and-switch tactics of the past will no longer be tolerated. By creating an easy to understand label, insurance companies will be held accountable and people will finally be able to make informed decisions that work best for them."

"Consumers today are able to get more information when buying a used car than when choosing a health care plan. Even when plans look similar from the outside – with comparable deductibles, co-pays, and so-called out-of-pocket limits – they can result in drastically different levels of out-of-pocket medical expenses," said Congresswoman DeLauro. "Surprise coverage gaps can result in delayed or foregone medical care, as well as astounding levels of medical debt – even when people thought they had good coverage. By creating a ‘Coverage Facts' label similar to the nutrition label on a box of cereal, the Informed Consumer Choices in Health Care Act of 2009 will simplify the process of choosing health care coverage and help families choose a plan that will really protect them in case of illness."

"As we move toward a uniquely American solution to health reform, it is paramount that consumers have clear and meaningful information to be able to compare health insurance options. Our plan ensures that American families know what they are signing up for, and how their health insurance will cover them in different circumstances. This is huge step forward for American consumers," said Congresswoman Schwartz.

The creation of a standardized comparison tool is supported by a recently released report, "Coverage When It Counts" which studied the adequacy and transparency of health insurance and found that a person undergoing a typical course of breast cancer treatment would end up spending nearly $4000 in one plan but $38,000 in the other plan – even though they had similar deductibles, co-pays, and "out-of-pocket limits."

Karen Pollitz, co-author of the report, and a research professor and project director at the Georgetown University Health Policy Institute, added, "Health care coverage should ensure that patients get the health care they need and that they are protected financially in case they get sick. For many consumers, having the right health care coverage can mean the difference between health security and financial catastrophe – yet consumers often cannot tell if a particular insurance policy will be adequate because of hidden contract terms and confusion about covered benefits and cost sharing. The Informed Consumer Choices in Health Care Act of 2009 would bring a refreshing and necessary dose of simplicity to the process of purchasing health care coverage – which in the end will help protect families' health and financial security."

Background

Lack of transparency can lead to unexpected medical expenses and significant debt – sixty-one percent of the 72 million adults under age 65 who had problems paying medical bills or were paying off medical debt in 2007 were insured at the time care was provided. Consumers cannot make meaningful choices if details of coverage are obscure or if the definitions of key terms such as "hospitalization", "outpatient care", or "out-of-pocket limit" vary from plan to plan.

The lack of health insurance transparency also contributes to administrative waste and complexity. More than half of health insurers do not provide physicians with the transparency necessary for an efficient claims processing system. Physicians and hospitals must divert substantial resources away from patient care to accurately determine patient insurance eligibility and benefit structure. Finally, there is currently no meaningful federal capacity to oversee federal health insurance provisions and provide states with technical assistance in effectively enforcing federal minimum standards for health insurance.

The Informed Consumer Choices in Health Care Act of 2009 will:

· Promote consistent standards for insurance information, including standard definitions of key insurance terms to be used in descriptions of plan benefits, so that consumers can make "apples to apples" comparisons of coverage options.

· Promote transparency in coverage by providing crucial data to consumers and health care providers, such as covered benefits and cost-sharing, marketing and underwriting practices, claims payment policies and practices, and timeliness of claims payments.

· Develop information resources, including "Coverage Facts" scenarios for health coverage to improve the ability of consumers and group health plans to compare the coverage and value provided under different health plans.

· Ensure accountability on existing federal minimum standards for health insurance, such as those enacted by the Mental Health Parity Act, the Genetic Information Nondiscrimination Act, and HIPAA.

· Create a new Office of Health Insurance Oversight within the Department of Health and Human Services to administer accountability and transparency initiatives in coordination with state insurance regulators.