HHS announced on Dec. 16 that it intends to offer states significant flexibility in establishing the essential health benefits required by the Affordable Care Act for health plans offered under new insurance exchanges starting in 2014.
Ten categories of services must be covered by law: (1) ambulatory patient services, (2) emergency services (3) hospitalization, (4) maternity and newborn care, (5) mental health and substance use disorder services, including behavioral health treatment, (6) prescription drugs, (7) rehabilitative and habilitative services and devices, (8) laboratory services, (9) preventive and wellness services and chronic disease management, and (10) pediatric services, including oral and vision care.
However the prospect of state variations is likely to leave consumers in
some locations with less adequate coverage. The full statement is at the link
below, which is followed by an excerpt: – Ellen Shaffer
Intended Regulatory Approach
As noted in the introduction, the Affordable Care Act authorizes the Secretary to define EHB. In response to the research and recommendations described above, as a general matter, our goal is to pursue an approach that will:
• Encompass the 10 categories of services identified in the statute;
• Reflect typical employer health benefit plans;
• Reflect balance among the categories;
• Account for diverse health needs across many populations;
• Ensure there are no incentives for coverage decisions, cost sharing or reimbursement rates to discriminate impermissibly against individuals because of their age, disability, or expected length of life;
• Ensure compliance with the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA);
• Provide States a role in defining EHB; and
• Balance comprehensiveness and affordability for those purchasing coverage.
As recommended by the IOM, HHSaims to balance comprehensiveness, affordability, and State flexibility while taking into account public input throughout the process of establishing and implementing EHB.23 Our intended approach to EHB incorporates plans typically offered by small employers and benefits that are covered across the current employer marketplace.
We intend to propose that EHB be defined by a benchmark plan selected by each State. The selected benchmark plan would serve as a reference plan, reflecting both the scope of services and any limits offered by a “typical employer plan” in that State as required by section 1302(b)(2)(A) of the Affordable Care Act. This approach is based on the approach established by Congress for the Children’s Health Insurance Program (CHIP), created in 1997, and for certain Medicaid populations. A major advantage of the benchmark approach is that it recognizes that issuers make a holistic decision in constructing a package of benefits and adopt packages they believe balance consumers’ needs for comprehensiveness and affordability. As described below, health insuranceissuers could adopt the scope of services and limits of the State benchmark, or vary it within the parameters described below.
Four Benchmark Plan Types
Our analysis of offerings that exist today suggests that the following four benchmark plan types for 2014 and 2015 best reflect the statutory standards for EHB in the Affordable Care Act:
(1) the largest plan by enrollment in any of the three largest small group insurance products in the State’s small group market;
(2) any of the largest three State employee health benefit plans by enrollment;
(3) any of the largest three national FEHBP plan options by enrollment; or
(4) the largest insured commercial non-Medicaid Health Maintenance Organization (HMO) operating in the State.
HHSintends to assess the benchmark process for the year 2016 and beyond based on evaluation and feedback.
To reflect the State flexibility recommended by the IOM, under our intended approach, States are permitted to select a single benchmark to serve as the standard for qualified health plans inside the Exchange operating in their State and plans offered in the individual and small group markets in their State. To determine enrollment in plans for specifying the benchmark options, we intend to propose to use enrollment data from the first quarter two years prior to the coverage year and that States select a benchmark in the third quarter two years prior to the coverage year. For example, enrollment data from HealthCare.gov for the first quarter of calendar year 2012 could be used to determine which plans would be potential benchmarks for State selection and the benchmark plan specified during the third quarter of 2012 for coverage year 2014. If a State does not exercise the option to select a benchmark health plan, we intend to propose that the default benchmark plan for that State would be the largest plan by enrollment in the largest product in the State’s small group market.