Essential health benefits (EHB) will play a fundamental role in shaping health plans after 2014. Part of the Affordable Care Act (ACA), EHBs define a baseline of 10 types of services those plans must cover, including prescription drugs, hospital services, preventive or wellness services, and chronic disease management. Qualified health plans (QHP) on health insurance exchanges (HIX), Medicaid health plans (for the ACA expansion population), state Basic Health Programs (BHP), and most other private health insurers all will need to offer policies that cover the essential health benefits.
States Have Some Flexibility to Choose Benchmark Plans:
States have some limited flexibility, however, to decide exactly what services make up the essential health benefits for plans within their boundaries. The Centers for Medicare and Medicaid Services (CMS) in November published proposed rules about how states should choose a benchmark plan to define the essential health benefits in each state. States have 10 options from which to choose a benchmark:
- One of the three largest state employee health plans, by enrollment
- One of the three largest Federal Employee Health Benefits (FEHB) plans
- One of the three largest small group plans in the state
- The state’s largest non-Medicaid health maintenance organization (HMO)
The default option, if a state does not choose a benchmark plan, will be for CMS to choose one of the small group plans as reference for essential health benefits. Health insurance exchanges will also include at least two insurers participating in the Multi-State Plan Program (MSPP), and the federal Office of Personnel Management (OPM) is determining the benchmark essential health benefits for those plans.
If a medical service is among the 10 types mandated by the ACA but is not in the selected benchmark benefit package, the state (or CMS) will add it to the package. This make the benchmarking process more complex, uncertain, and variable by state and ultimately reduces state flexibility.
Most Benchmark Plan Options are Similar:
Although it might seem that states will have a lot of latitude to pick a benchmark plan, an excellent brief from Milliman points out that the different options states can choose from cover most of the same services at similar cost, at least when it comes to state employee health plans. Most state employee plans offered comprehensive coverage for services from physicians, pharmacies, and hospitals – which make up the bulk of health insurance costs.
Milliman’s research revealed six services for which coverage costs varied the most, both between and within states:
- Artificial reproduction therapy, such as in-vitro fertilization
- Acupuncture
- Applied behavioral therapy for autism
- Chicropractic care
- Adult hearing aids
- Physical and occupational therapy
While those services do not matter to most consumers, people with specific health needs will care a great deal about whether their health plan covers them and at what cost. The Milliman brief discusses each of those six areas and includes a helpful table listing the different state employee, small group, and HMO plans in each state.
Another helpful resource for those interested in state essential health benefits is the CMS Center for Consumer Information and Oversight (CCIIO). The Center has published examples of proposed benchmark plans for each state, to help those who want to review and comment on its EHB proposed rules.