essential-benefits-health-insurance

Health reform’s 10 essential benefits

How the Affordable Care Act's essential benefits package will improve health insurance coverage for consumers

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On Dec. 16, the Department of Health and Human Services announced it intends to give states added flexibility in determining what goes into the essential benefits package required as part of the Affordable Care Act.

The essential benefits package must be offered by insurers in policies sold to individuals and small businesses. It’s not surprising then, that determining what should be considered an essential health benefit has proven controversial.

Pro-business interests maintain affordability should be the top consideration in determining benefits under ACA, while physicians, policy experts and patient-advocacy groups are pushing for broad coverage and national consistency. But just exactly what are the essential benefits categories?

The essentials

The ACA specifies ten benefits be included in all health insurance plans sold on state exchanges beginning Jan. 1, 2014 – the date exchanges must be operational. Any new plan sold to individuals or small groups must cover the essential benefits as of Jan. 1, 2014, even if the plan is not offered through an exchange.

The following summary gives a brief definition of the essential benefits and, when information is available, the percentage of people who have a need for the care and the average cost to an individual. Unless otherwise noted, data are from the Medical Expenditure Panel Survey (MEPS), large-scale surveys of individuals, medical providers, and employers. (While the data presented is several years old, it is used as it provides a nationwide view of cost information, which can vary widely by region.)

1. Ambulatory patient services

Definition: Care you receive without being admitted to a hospital – for example, at a clinic, physician’s office or same-day surgery center.

Who benefits? In 2008, 74 percent of U.S. adults had at least one ambulatory care visit.

2. Emergency services

Definition: Care for conditions which, if not immediately treated, could lead to serious disability or death.

Who benefits? According to the Centers for Disease Control and Prevention (CDC), 21 percent of adults visited an emergency room in 2009. The average ER visit cost $1,265 in 2008.

3. Hospitalization

Definition: Care you receive as a patient in a hospital, such as room and board, care from doctors and nurses, and tests and drugs administered during your stay.

Who benefits? The CDC estimates 8 percent of people spent at least one night in a hospital in 2010. Based on 2009 national data from the Agency for Healthcare Research and Quality (AHRQ), the average hospital stay was 4.6 days and the average cost was $9,173.

4. Maternity and newborn care

Definition: Care provided to women during pregnancy and during and after labor; care for newly born children

Who benefits? About 4 million babies are born each year in the U.S. The average cost for an uncomplicated pregnancy and delivery at a hospital is about $7,600 (in 2004 dollars).

5. Mental health and substance use disorder services,
including behavioral health treatment

Definition: Care to evaluate, diagnose and treat mental health and substance abuse issues.

Who benefits? The average annual cost to treat someone with a mental health or substance abuse issue was $1,531 in 2007.

6. Prescription drugs

Definition: Drugs prescribed by a doctor to treat an acute illness, like an infection, or an ongoing condition, like high blood pressure.

Who benefits? According to the CDC, 48 percent of people reported using at least one prescription in the previous month in 2008. People using one or more prescriptions in 2004 spent an average of $1,037.

7. Rehabilitative and habilitative services and devices

Definition: Services and devices to help people with injuries, disabilities or chronic conditions gain or recover mental and physical skills.

Who benefits? The range of care is diverse: fitting someone with an artificial limb, helping a child with a development disability participate at school, treating an athletic with a sports injury, helping a stroke victim regain speech skills and more. Looking only at Medicare beneficiaries in 2000 and considering only outpatient therapy services, 8.6 percent of people received care, and the average cost per person was $581.

8. Laboratory services

Definition: Testing blood, tissues, etc. from a patient to help a doctor diagnose a medical condition and monitor the effectiveness of treatment.

Who benefits? The American Clinical Laboratory Association estimates that lab tests enter into 70 percent of medical decisions, but account for less than 3 percent of health care spending.

9. Preventive and wellness services and chronic disease management

Definition: Preventive or wellness services include routine physicals, screening, and immunizations. Chronic disease management is an integrated approach to manage an ongoing condition, like asthma or diabetes.

Who benefits? According to a 2010 MetLife study, 45 percent of employer-provided benefit packages include a wellness program and a quarter include a disease-management program. MetLife’s 2009 study reported 57 percent of employees participated when a program was available to them. Employers usually offer these programs at no cost to employees, in hopes that the programs will reduce their healthcare cost over time. Wellness program providers often quote a savings of $3 for every $1 invested.

10. Pediatric services, including oral and vision care

Definition: The other nine essential benefits, but provided to kids. Of course, the mix of services and common conditions treated are quite different for different age groups.