Before 2010, understanding a health insurance plan required reading pages upon pages of information that often left policyholders confused at best and at worst, unable to figure out what types of services they received that helped them live a healthy lifestyle. Responding to consumer input, the United States Congress added a section in the 2010 Affordable Care Act (ACA) that created a Summary and Benefits Coverage (SBC). The new section of a health insurance policy provides a summary of what a health insurance plan covers in an organized way that allows you to compare plans with each other.
An SBC presents a quick look into a health insurance policy without you having to review complex and confusing legal documents sent by your health insurance company. Although a Summary of Benefits and Coverage is supposed to provide you with clarity as to what a health insurance plan offers, you need to know how to read one to understand the benefits you receive by purchasing one of several different competing plans.
Let’s take a look at five helpful tips for reading a Summary of Benefits and Coverage that accompanies every health insurance policy issued under the Affordable Care Act.
1) Start at the Top
Many SBCs contain pages of information that describe what you should receive with each health insurance plan. Although it is tempting to start reading the information highlighted in the most important sections of a Summary of Benefits and Coverage, just like a good novel, you should focus on deciphering the information by starting at the top of the pamphlet.
At the beginning of each SBC that you review, you should find the name of the insurance company and the name of the health insurance policy. Referred to as the header, the beginning of a health insurance plan purchased under the ACA also defines the plan’s coverage period and the type of plan, such as a PPO, HMO, or EPO. The type of plan describes the medical providers that you can access.
The last bit of information that is important at the beginning of a health insurance policy explains how many people in your family receive healthcare benefits from the policy.
2) Take Your Time
Although it represents a summary of your health insurance benefits and coverage, an SBC typically is a document that runs several pages. The often dry content can be difficult to digest in one sitting, which means you should take your time reading the entire content before deciding if the policy matches your healthcare needs, as well as fits in your monthly budget.
The most effective strategy to absorb all of the information presented in a Summary of Benefits and Coverage involves reading a section or two and then sitting the document down for a couple of hours before returning to the same one or two sections to absorb the same content again. Even though the ACA gives you a small window to purchase a qualifying health insurance plan, this does not mean you should rush through reading each SBC.
3) Get the Answers to Important Questions
Not all the information presented in an SBC is the same in terms of importance. Before you start reading an SBC, write down the following questions to ensure you receive answers to the most important issues surrounding the benefits and coverage of a health insurance policy.
- What is the annual deductible?
- Are there deductibles for specific types of coverage?
- What is the value of my maximum annual out-of-pocket costs?
- Does the plan place an annual limit on what it pays?
- Do I need to utilize a network of healthcare providers?
- Does the plan require me to get a referral to visit a healthcare specialist?
- What are the terms for copayments and coinsurance?
- What healthcare services does the plan not cover?
Knowing the answers to these eight questions should provide you with enough information to compare different health insurance policies.
4) Know the Common Medical Events Covered by a Policy
The section called “Common Medical Events” lets you know what to expect when the unexpected develops with your health status. Charges for seeing a specialist and completing certain diagnostic tests represent just a few of the healthcare services that you might have to pay for because they are not considered part of your benefits and coverage. This section also tells you the difference in healthcare costs between accessing a healthcare provider in and out of your health insurance provider network.
The types of services that are most frequently excluded from a health insurance policy include dental care, cosmetic surgery, and weight loss programs.
5) Legal Rights
A health insurance policy is referred to as a consumer product, which means you enjoy certain legal rights that apply to the purchase of all types of consumer goods. The section that covers your legal rights presents important information about the right to appeal a decision made by your health insurance carrier. If you purchased health insurance through an employer’s program, the rights and appeal information should contain helpful information that describes the legal obligations your employer had to facilitate your health insurance coverage. This information usually appears towards the end of a Summary of Benefits and Coverage.
Insurance Broker Hub Can Help You Understand the Summary of Benefits and Coverage
If you are in the process of purchasing a health insurance policy, the Summary of Benefits and Coverage represents a valuable source of information to help you make the right decision. Towards the end of an SBC, you should review a section that presents examples of different types of benefits and coverage for each health insurance policy under consideration.
The experts at Insurance Broker Hub can help you understand a Summary of Benefits and Coverage in order to choose the best plan. Even better, Insurance Broker Hub has helped over 10,000 consumers find the coverage they need at a price they can afford. Our free service gives you access to an independent network of national brokers who have the experience and expertise to design a plan around your needs and budget. Ready to get started? Simply request a no obligation health insurance quote here.