A Hidden Benefit of Health Reform – Insurance You Can Understand

I try to follow health policy pretty closely, but some aspects of the health care system remain mysterious. For example, I don’t fully understand what’s in my own insurance policy.

I’m aware that it generally covers care that is “medically necessary.” But what are the exclusions, limitations, deductibles and copayments for specific services? I’d have to spend hours reading the fine print to figure it all out.

Unless you are an insurance claims reviewer, you probably don’t know, either. A recent poll found that almost three-quarters of Americans find their health coverage extremely confusing.

The problem isn’t just that insurance policies are complicated. Each plan is different, and there are thousands of them across the country. And most people change plans about once every two years.

It’s also a problem for doctors when they try to get reimbursed. A recent study found that American medical practices spend over $27 billion a year in additional overhead to deal with coverage questions.

It’s enough to make some of them envy their colleagues in Canada. Doctors to our north work under a single-payer system where the administrative cost of obtaining reimbursement is only about one-quarter of what it is here.

The health reform law doesn’t solve the problem, but it makes a start. It requires insurance companies to summarize coverage on a simple, easy to understand form. The government issued a proposed format for the form last week. (Click here to see the proposed form.

The form won’t contain all the details of coverage, but it will at least make the main points understandable . You’ll easily see, for example, what it costs to see a primary care doctor, stay in a hospital, and have a lab test.

That will help everyone who has private insurance, including consumers who shop for policies in the new insurance exchanges that begin operating in 2014 and employees covered by their company’s plan.

Unfortunately, it won’t do much to help doctors. They will still have to parse each plan’s details to figure out what will be paid for each service. But, at least their patients will have a better idea of what kind of coverage they have.

Our multiple-payer health insurance system is extremely complex and difficult to navigate. Obamacare makes a start at bringing order, but there is much further to go.

We don’t have to create a single-payer system to simplify the system. Rules to standardize coverage and regulate consumer information can help a lot. The new form is a good first step.

Opponents may object to other aspects of health reform, but this part of it should not be controversial.

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