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Health, Science & Tech

New Requirement to Make it Easier to Understand Insurance Policies

Starting in September health care insurers will be required to write their policies in plain language. Currently,the policy descriptions sent to customers by insurance companies tend to be long and difficult to figure out. The Summary of Benefits and Coverage, which is required by The Patient Protection and Affordable Care Act, changes that.

"It doesn't use jargon or lingo or buzzwords that are confusing so that people will understand what coverage they have, what they're going to have to pay out of pocket like deductibles and copayments, what networks of physicians they can go to," said Ron Pollack, executive director of Families USA.

Now, the summary will be just that – a brief overview for every policy that lays out the plan in no more than 4 double-sided pages with no fine print. Pollack said the move will allow consumers to know exactly what they're getting.

"And for the many of us who actually can choose between more than one policy, we'll be able to compare apples to apples, so we'll have a real understanding of the strengths and weaknesses of different insurance policies and which are best for ourselves and our families," he said.

But even if you only have a choice of one plan, Pollack said, this is still important because most people don't fully understand what their policies actually cover. A report from Families USA states that 173 million people with private coverage will benefit from this provision nationally, 10.5 million in Pennsylvania.

The Summary of Benefits and Coverage must be distributed to those who enroll or re-enroll during an open enrollment period that begins on or after September 23, 2012.