Essential Benefits Package

Friday, December 11, 2009

While the Act mandates and enumerates coverage for various benefits, nothing prevents a plan from offering benefits beyond what the Act defines as “Essential”. Those plans that operate inside and outside the Health Insurance Exchange may continue to provide the essential benefits identified in the Act and even offer additional coverage. However, these benefits must be “offered under a separate policy, contract, or certificate of insurance.” The Act provides for inclusion of any and all medical practices, provided those practices are medically appropriate for the patient being treated.

The Act requires the Secretary of Labor to survey employer-sponsored plans to determine what benefits are included in those plans. The Secretary is then required to report his findings to the Health Benefits Advisory Committee and to the Secretary of Health and Human Services. This report will then be used by the Office of the Actuary of the Centers for Medicare & Medicaid Services to determine the “average prevailing employer-sponsored coverage in the” first year after enactment. This now becomes a benchmark or “reference package” with which to develop the benefits of the “Essential Benefits Package”.

The Act does set certain “minimum” services to be included:
o Hospitalization, outpatient/outpatient clinic, including emergency services
o Professional/physicians/other health professionals
o Medically required equipment/supplies
o Prescription drugs
o Rehabilitative/habilitative care
o Mental health/substance abuse, including behavioral health care
o Preventive services including recommended vaccines
o Maternity care.
o Well-baby/well-child care
o Oral health, vision/hearing services for children under 21
o (Adult oral health is pending a study by the Secretary of Health and Human Services)
o Durable medical equipment, prosthetics, orthotics/supplies
o Assessment/counseling cervices associated with domestic violence

The Act prohibits cost sharing for preventive services, (This is not an uncommon practice in many plans today). However, total cost sharing is capped at $5,000 and $10,000 annually for individual and family coverage, respectively. These amounts will be indexed and potentially adjusted annually. Cost sharing will be restricted to “co-payments” rather than “co-insurance”, where possible. (For most of the plans I have managed, it will be difficult for members to reach these levels with current co-payments around $30 to $50.) The goal is to provide benefit coverage that is 70% of the “full actuarial value of the benefits provided under the reference benefits package”. The “reference benefits package” are those services defined in the “Essential Benefits Package” without any cost sharing provisions.

In order for a carrier to participant in the Health Insurance Exchange, they are not “required” to offer abortion coverage, carriers and/or plan sponsors may include or exclude such services as they see fit. The public heath care option also appears to be free to offer or not offer abortion services “based on the law as in effect as of the date that is 6 months before the beginning of the plan year involved.” (Depending on the final outcome current developing legislation, this may change for the public option.)

The Act creates a Health Benefits Advisory Committee, chaired by the Surgeon General and composed of nine members appointed by the President, nine members appointed by the Comptroller General, and up to eight additional members “as the President may appoint”. Committee members serve a 3-year term, except initial member’s terms will be adjusted to stagger their appointments. Members are intended to be representatives reflecting a broad spectrum of health care experts including: providers, patients, employers, labor, carriers, financing/delivery, oral health, racial/ethnic disparities, health care needs of the disabled, governmental agencies, physician/health professionals, and child/adolescent health care. The role of the Committee will be to develop recommendations for the Secretary concerning “benefit standards” and provide periodic updates to its recommendations based on State and public input.

The “benefit standards” is measured relative to the Essential Benefits Package discussed earlier, in addition, the Committee will make recommendations for two additional levels of plans: an Enhanced and a Premium Plan. The Enhanced plan will have a cost sharing level equal to 85% of the actuarial value of the Essential Benefits Package and Premium plan will have a cost sharing level equal to 95%. (This is similar to the Massachusetts Health Care Reform law that provides for a Bronze, Silver, and Gold option from which individuals may select.)