How to read a Summary of Benefits and Coverage
The SBC is the standard form every health plan must give you. Here is how to read it in ten minutes and use it to compare plans on the same terms.
A Summary of Benefits and Coverage (SBC) is a short, standardized document that every health plan must give you so you can compare plans on the same terms. It shows the deductible, the out-of-pocket limit, what you pay for common services, what the plan does not cover, and three coverage examples of what a typical year of care might cost. You are entitled to it free, in plain language, when you shop, when you apply and when you renew, and on request. Reading the SBCs for your two or three finalists is the fastest way to see past the monthly premium.
Where to find it
- On Connect for Health Colorado, each plan's details page links to its SBC.
- From an employer, it comes with your open enrollment materials, or ask human resources.
- From the insurer's website, usually under plan documents.
- From me. When I compare plans for you, the SBCs are part of what we look at together.
Read it in this order
- The first-page questions: overall deductible, services covered before the deductible, separate deductibles (for example for drugs), and the out-of-pocket limit.
- Network: whether you need a referral for a specialist and whether out-of-network care is covered at all.
- The common medical events table: primary care visit, specialist visit, urgent care, ER, imaging, generic and brand drugs, outpatient surgery, hospital stay.
- Excluded services and other covered services: the short lists that often answer the question you actually have.
- Coverage examples: what the plan would pay, and what you would pay, for three standard scenarios.
Copay, coinsurance, deductible: the words that matter
| Term | What it means | Example of how it reads |
|---|---|---|
| Premium | What you pay every month to keep the plan | Not on the SBC; compare it separately |
| Deductible | What you pay for covered care before the plan starts sharing costs | "$X individual / $Y family" |
| Copay | A fixed dollar amount for a service | "$30 copay" for a primary care visit |
| Coinsurance | A percentage of the allowed amount you pay, often after the deductible | "30% coinsurance after deductible" |
| Out-of-pocket limit | The most you pay for covered in-network care in a year | Deductible, copays and coinsurance all count toward it |
Using the coverage examples
Every SBC ends with the same three scenarios, built by federal regulators: having a baby, managing type 2 diabetes for a year, and a simple fracture treated in the ER and follow-up care. Because every plan uses the same scenarios and the same assumed costs, the total you would pay in each example is one of the fairest side-by-side comparisons available.
Pick the example closest to your life. If you take daily medication, the diabetes example tells you more than the premium does. If you are healthy but active, look at the fracture.
What the SBC does not tell you
- Whether your specific doctors are in network. Check the insurer's provider directory by name.
- Whether your specific drugs are covered and on which tier. Check the formulary.
- The monthly premium, or the premium after your tax credit.
- Every rule. The SBC is a summary; the policy or evidence of coverage is the legal document.
A ten-minute comparison worksheet
- Write down each plan's premium after credits, times 12.
- Add the deductible and out-of-pocket limit.
- Note the cost of the three services you use most.
- Note the coverage example total that matches your life.
- Circle any exclusion that matters to you.
The bottom line
The SBC turns a confusing choice into a fair comparison, as long as you read the same sections for each plan. If you would like to walk through your finalists together, send Lisa a message or call (303) 887-8584. There is no cost for my help.
Want to go through this with someone?
Lisa Asmussen at our Brighton office will go through your doctors, your prescriptions and your real numbers, and explain plainly what we found. Take the Stress Out of Medicare
Sources
- HealthCare.gov: Summary of Benefits and Coverage, HealthCare.gov (CMS)
Please note: Headwaters Health and Wealth is not affiliated with, endorsed by, or operating on behalf of Connect for Health Colorado, HealthCare.gov, the Health Insurance Marketplace, or any federal or state government agency. Plan availability, premiums and advance premium tax credits are set by the carriers and the Marketplace.