Digging deeper on the effects of Obamacare
Just because President Obama and his team have been pathetic when it comes to letting Americans know what’s in his healthcare reform law doesn’t mean the press shouldn’t be zeroing in on this huge, multifaceted story. The law is packed with changes – some of which have already taken effect but have barely been written about – whose ramifications range from likely upheavals in the advertising and marketing industries to an apparent lifeline for all Americans who are mystified or even tormented when dealing with their health insurers.
A marketing explosion
Let’s start with the business angles. As this article from Advertising Age points out, once various provisions of Obamacare take effect, key sectors of the healthcare industry, particularly hospitals and insurance companies, are going to have to become heavily engaged in consumer marketing and communications. In the last few years we’ve seen some hospitals use advertising to establish their brand, and, as I mentioned in this column in February, United HealthCare has been aggressively advertising to consumers.
All of these early efforts are about to be taken to a whole new level because of Obamacare – which requires that by 2014 everyone must buy health insurance and every state must have an exchange where consumers can go online and compare insurers’ offerings. This means not only that the market for health insurance is going to expand but also that much of it is likely to be sold directly to individual consumers rather than through an employer. Meantime, hospitals and doctors’ networks will want to advertise to have more leverage in negotiating with insurers to include them in the insurers’ networks.
That there is already a robust community of public relations, marketing, advertising, and market research professionals who specialize in the multitrillion-dollar healthcare industry is itself an interesting story. But getting inside the dynamics of how that business is now going to explode – and which big players, such as the largest ad agencies, are likely to start buying up the specialists – is a much bigger deal.
Healthcare is the largest industry in the world’s largest economy, and, with the exception of the drugmakers, those who provide it have never really had to communicate directly with consumers, let alone compete for them.
However, there’s an even bigger story related to the coming competition in healthcare: How, if at all, is this explosion of new marketing and advertising going to be regulated? What will hospitals be allowed to say about their safety and survival rates? What records, if any, might regulators force them to disclose? And who would those regulators be? The Federal Trade Commission? The Food and Drug Administration? How will the turf be divided and what authority does either agency have?
Insurance in plain English
In that prior column I wondered why health insurance companies aren’t compelled to provide data on claims paid versus claims rejected. I now realize I missed a much more basic issue: Why aren’t insurers required to write and present their policies in plain English? Put simply, there is little chance that you have any idea of exactly what your health insurance policy covers or doesn’t cover, even if the policy is sitting in front of you.
This, it turns out, is one of the key aspects of Obama care that the President and his staff have done such a lousy job of touting. The new law doesn’t appear to require insurers to report their rejection rates, but it does require something far more important: All health insurance companies and group health plans must provide all customers with a plain English summary of benefits, including a glossary that explains any key terms – “network,” or “habilitation services,” for example — in simple English. And this isn’t one of those provisions in the law that doesn’t happen until 2014; it goes into effect this Sept. 23, or about 10 weeks from now.
This provision, calling for a “Summary of Benefits and Coverage and Uniform Glossary,” is hardly buried in the 2,407-page bill; it’s on page 23. But I haven’t seen or read anything about it.
Here are excerpts from its requirements, which I’m including here because they describe, or prescribe, a document that is worlds away from anything any American with health insurance has ever seen:
“(1) APPEARANCE.—The standards shall ensure that the summary of benefits and coverage is presented in a uniform format that does not exceed 4 pages in length and does not include print smaller than 12-point font.
“(2) LANGUAGE.—The standards shall ensure that the summary is presented in a culturally and linguistically appropriate manner and utilizes terminology understandable by the average plan enrollee.
“(3) CONTENTS.—The standards shall ensure that the summary of benefits and coverage includes—
“(A) uniform definitions of standard insurance terms and medical terms (consistent with subsection (g)) so that consumers may compare health insurance coverage and understand the terms of coverage (or exception to such coverage);
“(B) a description of the coverage, including cost sharing for—
“(i) each of the categories of the essential health benefits described in subparagraphs (A) through (J) of section 1302(b)(1) of the Patient Protection and Affordable Care Act; and
“(ii) other benefits, as identified by the Secretary
“(C) the exceptions, reductions, and limitations on coverage;
“(D) the cost-sharing provisions, including deductible, coinsurance, and co-payment obligations;
“(E) the renewability and continuation of coverage provisions;
‘‘(F) a coverage facts label that includes examples to illustrate common benefits scenarios, including pregnancy and serious or chronic medical conditions and related cost sharing, such scenarios to be based on recognized clinical practice guidelines….
“(I) a contact number for the consumer to call with additional questions and an Internet web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained….
The new law required Secretary of Health and Human Services Kathleen Sebelius to consult with state insurance commissioners, insurance companies, patient advocates and even “those representing individuals with limited English proficiency” to come up with the template for this revolutionary four-page document—which she did.
Her template, which became six pages including “coverage examples” and frequently asked questions, can be found here, and it’s an extraordinary step forward. (Indeed, a camera shot of one of its pages, with a brief narrative explanation from the president, would make for a better Obama re-election TV ad than anything I’ve seen from his campaign so far.)
It would be great to see a story on how the template was put together, what the potential weaknesses are and, most important, how insurance companies are working to comply with, or find loopholes in, its mandates by September, when they have to fill it in with their own language summarizing their own plans.
The law stipulates a fine of $1,000 per insurance customer for each time someone is not given an adequate document. Editors ought to be assigning stories now on how that’s going to be enforced.
Insurance companies and group health plans must also provide 60 days’ notice whenever any of the provisions in their plans, as summarized in the new document, are about to be changed. That sounds like good protection for patients, but it prompts a final question: I don’t see anything in the statute prohibiting insurance companies from changing their plans midstream – say, by deciding to disallow some drug or not to cover some procedure it had been covering.
I’ve always wondered about that, because if an insurance plan is a contract – I agree to pay the company, and it agrees to provide certain coverage – how can the company change the deal before the contract ends? What are the rules, if any, about that?
Appealing rejected claims
There are all kinds of other provisions in Obamacare that are equally important, some of which have supposedly already been implemented, but that also seem to have eluded the press.
Another example: There’s a provision guaranteeing as of last January that a patient denied coverage by his insurance carrier not only can appeal to the insurance company (which must respond within specific deadlines) but also has the right, as the law puts it, to an “effective external review process that meets minimum standards established by the Secretary.” What does that mean, and how is it being implemented? Our family recently contested a rejected claim and we were not told of any right to appeal to an outside, independent party. If this requirement has not been implemented, that’s a great story, too.
Obamacare will have sweeping effects on a larger sector of our economy and a broader swathe of our population than any law in recent history. It’s time to switch from solely focusing on the political and legal battles surrounding it to how it’s actually working and going to work.
PHOTO: Patient Sharon Dawson Coates has her knee examined by Dr. Narang at University of Chicago Medicine Urgent Care Clinic in Chicago, June 28, 2012. REUTERS/Jim Young