Healthcare: Insurance policies must have transparency, accountability

 As we know from experience, “consumer choice” is meaningless without good information. When we buy anything from a car to a box of cereal, we can survey the crash test ratings or the “back-of-the-box” nutritional information to come to an informed decision about our purchase. But, even though health insurance affects our health and well-being — and wallets — more than any consumer product, the health insurance market is a bewildering thicket of hidden terms, legalese, and surprise benefit exclusions and limitations. Many consumers can’t even obtain a full copy of an insurance policy before signing on the dotted line.

How bad is it? For one, there are no standard definitions for key terms like “hospitalization,” “outpatient care,” or “out-of-pocket limit” — they vary from plan to plan. As a recent Consumer Reports article noted, under some plans, “hospitalization” starts on the first day, others the second. Meanwhile, 53 percent of Americans are not sure whether their current insurance would limit their out-of-pocket costs if they were diagnosed with a disease like cancer.

This confusion is more than just a dangerous aggravation for consumers. Because physicians and hospitals must take valuable time away from patient care to accurately determine patient insurance eligibility and benefits, lack of transparency adds administrative waste to the system and detracts from the doctor-patient relationship. For all of these reasons I, along with Rep. Allyson Schwartz (D-Pa.) and Sen. Jay Rockefeller (D-W.Va.), have introduced the Informed Consumer Choices in Health Care Act of 2009.

Our bill focuses on transparency and accountability. With regard to the former, the bill would provide a “Coverage Facts” label, akin to FDA nutritional info, that customers could use to evaluate various plans more effectively. Along these lines, it would require standard definitions of key insurance terms, so consumers can finally compare “apples to apples” in the health insurance market.

Of course, transparency alone is not enough — we must also ensure that “bad apples” aren’t cluttering the market. That is why our bill also provides new enforcement authority and resources to ensure that that health insurers follow federal rules about health insurance.

Yes, stronger federal enforcement is necessary. Just last month, at an Oversight and Investigations Subcommittee hearing, three major insurance companies refused to promise that from now on they would follow federal law regarding rescissions, or terminations of insurance policies. Stronger federal authority and resources are needed to keep insurance companies accountable and support states as the front-line enforcers of new federal requirements.

With this bill, we can bring both transparency and accountability to the health insurance market, and make it work better for patients and doctors alike. On this most important of purchases, consumers should not have to take a stab in the dark.

DeLauro is a member of the House Subcommittee on Labor, Health and Human Services, Education and Related Agencies in Appropriations.