New Law Forces Health Insurance Companies to Use Plain Language to Explain Policies

Tuesday, January 08, 2013
(graphic: CSP Central)

Making sense of health insurance policies should become easier for consumers, due to one provision of the federal healthcare reform law that kicked in on January 1.


Insurers must now explain to policyholders the “what” and “how” of their coverage using simple language, instead of the jargon-laden descriptions companies used to rely on (presumably to confuse people).


The mandate in the Obamacare law says insurance companies must provide details in no more than four pages that utilize plain English, and include easy-to understand formats that allow for “apples-to-apples comparisons among health plans,” according to Wendell Potter.


Potter, a former insurance company executive, lauded the change in law because he felt the industry had “profited for years by using legalese and gobbledygook in describing their policies, and also by purposely withholding information we really need to make informed coverage decisions.”


This means Americans should never have to read something like the description below that was lifted from an insurance policy a few years ago:


“Benefits are payable for Covered Medical Expenses (see ``Definitions'') less any Deductible incurred by or for a Covered Person for loss due to Injury or Sickness subject to: (a) the Maximum Benefit for all services; (b) the maximum amount for specific services; both as set forth in the Schedule of Benefits; and (c) any coinsurance amount set forth in the Schedule of Benefits or any endorsement hereto. The total payable for all Covered Medical Expenses shall never exceed the Maximum Benefit stated in the Schedule of Benefits. Read the ``Definitions'' section and the ``Exclusions and Limitations'' section carefully.”

-Noel Brinkerhoff


To Learn More:

Finally, Plain English From Health Insurance Companies (by Wendell Potter)

Insurance Company 1: Plan Option 1 [sample new policy]

Congress Passes Bill to Force Government Agencies to Use Plain Language in Public Documents (by Noel Brinkerhoff, AllGov)

Replacing Government-Speak with Clear Words—U.S. Edition (by Noel Brinkerhoff, AllGov)


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