Check the Label: Helping Consumers Shop for Individual Health Coverage

Katherine B. Wilson

Comparing individual health insurance plans is so confusing that many people remain uninsured. This issue brief reports on CHCF-commissioned consumer testing of a standardized format — similar to a nutrition label — that lets shoppers compare plans.

June 2008

Almost three million Californians purchase their own health insurance in the individual market. Millions more are potential purchasers of individual coverage but remain uninsured because of the difficulty of selecting the best insurance option among scores of alternatives.

CHCF commissioned the design and testing of a standardized label that could potentially be required for all health insurance products. Called "Coverage Facts," the label prototype would allow consumers to easily compare policy costs, benefits, and exclusions. It would also provide measures of overall value, including:

  • Percentage of expenses paid by insurance
  • Annual out-of-pocket expenses
  • Total annual cost

The research participants revealed a number of concerns about shopping for individual insurance, such as complex policy configurations, lack of trust that the information is complete and reliable, and inability to find apples-to-apples comparisons. They responded positively to the Coverage Facts format and suggested that such a reporting system should reflect the endorsement of a trusted, independent body that would hold insurers accountable to fulfill coverage promises.

This issue brief is available under Document Downloads.