It’s incredibly hard to buy health coverage as an individual, and it’s harder to figure out what you actually are covered for, reports Anna Wilde Matthews at the Wall Street Journal in “The Importance of Deciphering Your Insurance.” She reports on the problems, and also cites California’s AB786(Jones)–which just passed the Assembly this week–as part of efforts around the country:
Lawmakers and regulators in states including Texas, Vermont and New York are pushing new efforts to make health insurers’ consumer communications clearer, though many states already have some requirements on their books. Rhode Island’s health insurance commissioner wants to make insurers write all documents at an eighth-grade level. A California bill would classify insurance plans by their levels of coverage.
My post today at TNR’s The Treatment also touches on this theme, referencing both AB786(Jones) and provisions of national health reform that would help consumers better to comparison shop, and fundamentally understand what they are buying. Consumers aren’t actuaries, and don’t know the general costs of ailments and injuries they haven’t yet had.
Why is this important? The new study from earlier this week on personal bankruptcies makes the point: Over 60% of bankruptcies involve medical bills as a factor, and around 75% of those bankruptcies are people with health coverage. In many cases, their coveraeg has let them down. At a minimum, people expect health coverage to prevent them from going into bankruptcy. If it doesn’t do that, then it doesn’t deserve to be called coverage.