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

The 2010 Affordable Care Act (ACA) calls for a new health insurance disclosure form “so that consumers may compare health insurance coverage and understand the terms of coverage (or exception to that coverage).” The ACA requires all health insurance plans to use this form—group and non-group, grandfathered and non-grandfathered—beginning in 2012. The disclosure will affect over 180 million Americans when it goes into effect.

This disclosure will convey information familiar to health insurance shoppers, such as premiums and patient cost-sharing amounts—deductibles, co-pays and out-of-pocket limits. But it will also include a new component, one which takes those discrete cost-sharing components and calculates the bottom line cost for a consumer for several hypothetical medical scenarios.

This new feature, called the Coverage Facts Label (CFL, also known as Coverage Examples), has not previously been available to consumers when they shop for a health plan. Hence, Consumers Union and the Kleimann Communication Group conducted this consumer testing study to learn more about how this label might help, or possibly confuse, consumers.