Why Is Health Insurance So Complicated?

12/02/2017 10:56 am ET
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Hemera Getty Images Plus

What can be done to simplify health insurance policies in order to better educate consumers? originally appeared on Quora - the place to gain and share knowledge, empowering people to learn from others and better understand the world.

Answer by Jennifer Fitzgerald, CEO and Co-Founder of Policygenius, on Quora:

Simplifying insurance is something we think about a lot at Policygenius. The healthcare system as a whole is pretty convoluted, but there are steps the government, insurance companies, and healthcare providers can all take to make policies and shopping easier.

A lot of the confusion this year is because the Trump Administration is changing parts of the ACA. For instance, a recent executive order loosened the rules around what health benefits insurance companies must offer with certain plans. (The ACA currently stipulates insurers cover ten essential health benefits, which a recent Policygenius poll found 78% of Americans can’t identify.) That’s unfortunate in the sense that standardizing policies can go a long way:

Consumers don’t have to make sure they have a plan that provides key coverages, like prescription drugs, when they’re shopping around. It’s easier to educate consumers when policy information is relatively the same.

It would also help consumers if information was provided in a form they could easily understand. Have you ever tried to read a Summary of Benefits? Even though insurance companies are supposed to provide, in the words of Healthcare.gov, a “short, plain-language Summary of Benefits and Coverage”, they can still be complicated and jargon-filled — and up to 8 pages. Zocdoc has done a great job of “redesigning” insurance cards to make them more straightforward and easy to read. Insurance policies should be given a similar makeover. Think of the Schumer boxes credit card issuers have to include with their applications.

Finally, it’s hard to know how much protection a health insurance plan provides without knowing the costs of medical procedures, and trying to find those prices is like pulling teeth. That’s often because doctors themselves don’t know; the hospital simply bills your insurer, and then, depending on your policy’s deductible, copay, and/or co-insurance, you could be stuck with a big bill yourself. And within the same hospital, a doctor could be in-network while an anesthesiologist is out of network. Doctors need to be more aware of the real costs being passed on to consumers, and facilities need to be more transparent about how patients are billed.

In the meantime, Amino is a great resource to see the price of procedures in your area (with your insurance) so you can compare different doctors and facilities.

Overall, transparency and uniformity is key to making health insurance policies easier to understand. The challenge is that everyone, not just consumers, has to get onboard to make it work.

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