Most people do not know the answer to this question.
Of course, individuals like plans with lower health insurance premiums, but patient deductibles, copayment and coinsurance rates also will determine how much the consumer will end up paying for a given insurance plan. Even if costs are similar across insurance plans, benefits packages may not be. How can consumers compare health insurance cost and benefit characteristics across plans?
Currently, this is fairly difficult. The California HealthCare Foundation (CHCF) is calling for standardized labelling of health insurance products. For instance, credit card companies must disclose a standardized set of information regarding the card’s characteristics (see example) and mutual funds must disclose standardized prospectuses including fund expenses, holdings, and other key characteristics.
According to the CHCF, a standardized health insurance disclosure would reveal the following characteristics of the plans:
- Annual Premium
- Annual Deductible
- The Percent of Health Expenditures paid by the insurance company
- Total cost (Premium + OOP expenses) for a consumer with average health
- Out of pocket maximum
- Various copayments and coinsurance rates for doctor’s visits, emergency room visits, surgery, etc.
- Are maternity benefits covered
Even though it is impossible to disclose all pertinent information with respect to health insurance characteristics, having some sort of standardized disclosure form could aid consumers in shopping for the best deal.