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How to Compare Health Care Plans under the Affordable Care Act

Copyright © 2014 AARP. All rights reserved.

When it comes to comparing health care plans on your state’s Health Insurance Marketplace, the Summary of Benefits and Coverage (SBC) the Affordable Care Act (ACA) requires is your new best friend.

The SBC is a form that every insurance plan is required to use going forward so you can understand your current coverage and/or what you’re considering buying. It’s similar to the Nutrition Facts label you see on packaged foods. You can compare plans “apples to apples” because the information for each plan is laid out in the same way, using language that you can understand.

Each SBC gives you straightforward, easy-to-understand information about what your insurance covers, what it doesn’t, and how much you pay. The federal government developed a template for the SBC that all insurers must use so you can make apples-to-apples comparisons among plans. The template requires that the insurer tell you these details:

  • The plan’s overall deductible

  • Other deductibles that may apply for special services

  • Any out-of-pocket limits on your expenses

  • Items that aren’t included in your out-of-pocket limit

  • The annual limit on what the plan pays (if there is one)

  • Whether the plan uses a network of providers

  • Whether you must request a referral to see a specialist

  • Any services that the plan doesn’t cover

The SBC then lists common medical events (such as visiting a doctor’s office, needing prescription drugs, and having outpatient surgery) and asks the insurer to tell you what your costs would be if you used an in-network provider and an out-of-network provider, as well as what limitations or exceptions may exist in the plan related to those events.

There are also examples that show how the plan would cover two specific situations: a normal birth and management of type 2 diabetes. Since all plans have to use the same example, it may help consumers see how the coverage works.

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