Proposed Health Insurance Labels Could Make Buying Easier

What if comparing health insurance policies was as easy as comparing soup can labels at the grocery store? A group of Texas doctors and at least two state lawmakers want to make that a reality, but not everyone thinks it’s a good idea. Jack Williams reports.

The idea is pretty simple; require insurance companies that do business in Texas to create a standardized label that potential customers could use to easily compare policies.

“It is really aimed at better equipping the consumer to know what he is actually paying for when he makes that purchase of health insurance.”

Houston State Representative Senfronia Thompson has filed one of two bills in Austin, the other is in the Senate, so-called “soup label” legislation that would make buying health insurance a lot simpler. 

“We don’t want it to be [a] surprise when you have to make use of your insurance and you pop into the hospital and have to make use of it and they say, oh, you’re not covered under this or you’re not covered under that. It gives them an opportunity to make comparisons so that they would be a better informed consumer in being able to purchase health insurance for themselves or members of their family.”   

The standardized labels would include basic policy information, things like average out-of-pocket costs, total annual costs, co-pays and deductibles. Dr. Josie Williams is the president of the Texas Medical Association.

“If this was done appropriately then every insurer would have something very similar and I as the consumer would be able to lay one insurance plan beside the other and actually compare the insurance plans. We do not have that today. It does not exist and what we do have is very complex, very difficult to understand policies.”

But Jared Wolfe, executive director of the Texas Association of Health Plans, says the bill is more about advertising regulation than anything else. He says it would require certain font sizes, script styles and ad sizes. He says the bill over-reaches and micro-manages.

“We’re pretty much behind the concept of giving consumers the information they want and need to make purchasing decisions on health insurance. I don’t think that’s what their bill does. I think their bill is much more of an advertising regulation bill than it is trying to get useful information in the hand of consumers.” 

Both sides say there’s room for negotiation. Last week, a House Insurance Committee left the bill pending, which usually means a modified version will likely get passed on for the full House and Senate to vote on later.