On December 16, 2011, the Department of Health and Human Services (HHS) issued a bulletin outlining proposed policies that will give states more flexibility and freedom to implement the Affordable Care Act (ACA), and informs the public about the approach that HHS intends to pursue in rulemaking to define essential health benefits (EHB).
HHS states it released this intended approach to give consumers, states, employers, and issuers timely information as they work toward establishing Affordable Insurance Exchanges (Exchanges) and making decisions for 2014. This approach was developed with input from the American people, as well as reports from the Department of Labor (DOL), the Institute of Medicine (IOM), and research conducted by HHS.
Essential Health Benefits
To achieve the ACA goals, the law ensures health plans offered in the individual and small-group markets, both inside and outside of the Exchanges, offer EHB, which must include items and services within at least the following ten categories:
- Ambulatory patient services.
- Emergency services.
- Hospitalization.
- Maternity and newborn care.
- Mental-health and substance-use disorder services, including behavioral-health treatment.
- Prescription drugs.
- Rehabilitative and habilitative services and devices.
- Laboratory services.
- Preventive and wellness services and chronic-disease management.
- Pediatric services, including oral and vision care.
Direct Reference to O&P
The only direct reference to O&P is found under the subheading “Similarities and Differences in Benefit Coverage Across Markets:”
For example, across the markets and plans examined, it appears that the following benefits are consistently covered: physician and specialist office visits, inpatient and outpatient surgery, hospitalization, organ transplants, emergency services, maternity care, inpatient and outpatient mental-health and substance-use disorder services, generic and brand prescription drugs, physical, occupational and speech therapy, durable medical equipment, prosthetics and orthotics, laboratory and imaging services, preventive care and nutritional counseling services for patients with diabetes, and well-child and pediatric services such as immunizations. As noted in a previous HHS analysis, variation appears to be much greater for cost-sharing than for covered services.
Intended Approach
HHS intends to propose that EHB are defined using a benchmark approach. Under the HHS’s intended approach announced in this bulletin, states would have the flexibility to select a benchmark plan that reflects the scope of services offered by a “typical employer plan.” This approach would give states the flexibility to select a plan that would best meet the needs of their citizens.
States would choose one of the following benchmark health-insurance plans:
- One of the three largest small-group plans in the state by enrollment.
- One of the three largest state-employee health plans by enrollment.
- One of the three largest federal-employee health plan options by enrollment.
- The largest health maintenance organization (HMO) plan offered in the state’s commercial market by enrollment.
If states choose not to select a benchmark, HHS intends to propose that the default benchmark will be the small-group plan with the largest enrollment in the state. The benefits and services included in the benchmark health-insurance plan selected by the state would be the EHB package. Plans could modify coverage within a benefit category so long as they do not reduce the value of coverage.
If a state selects a benchmark plan that does not cover all ten mandatory care categories, the state will have the option to examine other insurance plans, including the federal employee health-benefits plan, to determine the type of benefits that must be included in the EHB package.
Updating the Approach
HHS intends to propose that benchmarks will be updated in the future, and that state mandates outside the definition of EHB may not be included in future years. The bulletin also notes that updating the benchmark will allow benefits to reflect the most up-to-date medical and market practices.
Public Input
Although this bulletin represents only the intended regulatory approach, public input on this paper is encouraged. Comments are due by January 31, 2012, and can be sent to [email protected]
