Early Consumer Testing of the Coverage Facts Label: A New Way of Comparing Health Insurance

This Consumers Union report, supported by NYHealth and the Missouri Foundation for Health, reviews findings based on consumer interviews and testing of a new health insurance disclosure form that will make it easier for consumers to understand their health plan options and associated costs.

The Affordable Care Act of 2010 calls for health insurance disclosure forms to include Coverage Facts Labels, a new method for consumers to compare health plans and to understand the terms of coverage. Beginning in 2012, all health insurance plans must use these forms. The labels take traditional health plan information, such as premiums and patient cost-sharing, and calculate what consumers would have to pay out of pocket for several hypothetical medical scenarios such as having a baby, treating breast cancer, or treating diabetes.

The report summarizes the findings from consumer interviews and usability testing of the Coverage Facts Labels and concludes that consumers did find the labels to be a useful tool in understanding their coverage options. It also includes consumer suggestions for improving the form such as reducing the number of disclaimers; making available short, understandable definitions of key terms commonly misunderstood by consumers; and developing additional medical scenarios that consumers could view online.