Since the passage of health reform (Affordable Care Act), many have wondered what would be covered in the benefits offered through the State Exchanges. We have been reassured that the benefits that are "essential" would be comprehensive yet affordable. But essential to whom? What is an essential benefit and who gets to decide? Tough questions. No easy answers.
Today HHS released a bulletin punting part of the issue to the States. States will have more "flexibility" to determine what is in the essential benefit package. Of course, not complete flexibility. These benefit plans MUST include, at least, the ten categories of benefits that are defined in the law. Those categories include:
Section 1302(b)(1) provides that EHB include items and services within the following 10 benefit categories: (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.
Do you see anything that is missing? Do you see anything in this list that a plan offered to an individual or small group in your state might NOT include? Look again. Item #7 -- "habilitative" services and devices;" and item #10 -- "pediatric services, including oral and vision care." These categories are not commonly found in the more restrictive plans offered to individuals and small groups. In fact, the concept of a "habilitative benefit" is not widely understood nor is there a common definition, particularly among private insurance pans. HHS acknowledges that some plans in a state might not include those services, so they are working on a way to better define these services and allow states the "flexibility" to get creative about how they offer these services. For people who may need help maintaining function not just regaining it, this is a process they should watch very carefully.
Here are some questions that you might want to know about what is unfolding:
1) Why give states more flexibility to define what services are essential? Is a person in Florida really all that different from a person in Nebraska? Are there diseases in Florida that do not occur in Nebraska? Not really. The idea of "state flexibility" is often proposed to mitigate political opposition and deflect charges that this is a government takeover of health care. But it probably won't work here, because the law actually does define what is essential -- the ten categories. And there is no real flexibility for states to drop an entire category.
2) The law says that benefits must be equivalent to a "typical employer plan." Who defines what is typical? Is there any such thing? Actually, HHS went to some trouble to try to figure that one out. They analyzed a variety of benefit packages in the states and determined that the real variation was not so much across the ten categories (except for habilitation and oral and vision care for kids), as in the cost sharing for these services. So states can vary cost sharing and they can also choose what a typical or "benchmark" plan will be -- it could be the largest commercial HMO plan in the state, the largest small group plan, or a state or federal employees plan. If a state declines or is unable to choose a benchmark, there is a default benchmark which the state must choose.
3) What if a service I need is not considered "essential?" Where does chiropractic care fall in the ten categories? What about acupuncture? In vitro fertilization? Contraception coverage? Contraception coverage WILL be considered essential (if it is FDA-approved). That question has already been asked and answered by HHS. As for other services, this will be a state by state decision.
4) If your state already mandates that certain services be included in the benefit packages sold in my state, what happens to those benefits? There are literally hundreds of state mandated benefits across the 50 states, and there is considerable variability. Only a few states mandate autism services; many more mandate chiropractic. But here is where HHS most definitely punted and even poked states a bit in the eye. Since there was no way that all state benefit mandates could be included in a benefit package that was still affordable, HHS left it to the states to pay for the mandates they had already passed -- and states have to include those mandates in the essential package, at least for the first few years of the Exchange. State mandates are a mixed bag. Some are lobbied by the providers themselves; others by consumers and families. If you are giving states flexibility about adding services, it makes sense that they should have to live by the decisions they have already made.
5) How did HHS define a "medical necessary" benefit? They apparently did not. Even though the Institute of Medicine report recommended that this term of art be based on evidence not just the judgment of an individual doctor, HHS has not yet issued their recommendations. You may never have encountered a denial from your health plan because the service you and your doctor requested was not considered "medically necessary." But it is important to understand how this term is used in your plan. Appeals are a worthless exercise if you, as a consumer, do not understand the process by which a plan determines what they will pay for.
What is good about what the essential benefits as we understand them now? For one thing, mental health and substance abuse services are considered essential -- and that means no annual or lifetime limits, just as with medical services (after 2014); maternity care is included and essential, and not all small group or individual plans include maternity care; children can get some vision and dental care; if you have had an accident and you need ongoing physical therapy, there is a chance you can continue to get coverage to maintain your level of physical ability. Also, if your state mandates coverage of services you value, like acupuncture or chiropractic care, those benefits will be included as well.
What's next for essential benefits? There is a comment period during which time any person or group can submit their opinions and questions to HHS. ( Public input on this proposal is encouraged. Comments are due by Jan 31, 2012 and can be sent to: EssentialHealthBenefits@cms.hhs.gov.) Sometime in 2012, HHS will issue final regulations. And then? Well, check out what is going on in your state. 2014 is not that far away.