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Health reform’s 10 essential benefits will help

... and how state "flexibility" will affect your benefits

10 essential benefits of health reformThe U.S. Department of Health and Human Services released some additional information last week about which benefits would be considered “essential” in the health plans offered in the states after 2014. The guidance offered states at least some “flexibility” in the way they design the benefits that must be offered to individuals and small group products, both within and outside the state exchange.

The fact that the Affordable Care Act defines ten mandatory categories of “essential benefits” provides a “floor” of coverage that can not be taken away. After 2014, no plan offered to individuals or small groups can exclude maternity care, prescription drugs, rehabilitation or habilitation services, or mental health services, to mention a few. But many people are concerned about what happens within these categories.

What limits will there be on visits or types of specific services? If you are a family with an autistic child, you are keenly interested in whether or not the “habilitative” services will cover behavioral treatment for your child. If you have a bad back, you may wonder if chiropractic or acupuncture services will be covered. If you need mental health services, you may ask if there are visit limits or restrictions on settings of care such as residential facilities.

In its offer of “flexibility,” HHS gave states a choice of four types of plans they can use as a “benchmark” plan. The four choices are:

  1. the largest plan by enrollment in any of the three largest small group insurance products in the state’s small group market;
  2. any of the largest three state employee health benefit plans by enrollment;
  3. any of the largest three national FEHBP plan options by enrollment; or
  4. the largest insured commercial non-Medicaid Health Maintenance Organization (HMO) operating in the state.

If the state can not agree on which plan to select – let’s imagine that the state legislature and the exchange board are completely at odds over this – there is a “default” benchmark which the state must choose. And if a state chooses a benchmark plan that is missing one of the ten categories of essential benefits, the state has to substitute that benefit from one of the other options. That means that there can be no monkey business about excluding maternity care or dental services for kids that are less commonly offered in some of these small group products.

Most state employee health plans or federal employee health plans (FEHBP) include most, if not all, of the benefits mandated by that state. The state employee plans generally are quite comprehensive. It’s the small-group products that tend to be more restrictive.

For example, in its analysis, HHS discovered that only 59 percent of small group plans in the states cover what is called “habilitative services.” Those services are generally not included in private insurance products and are designed to “maintain function” – not just improve it. Furthermore, only 5 percent of the small group plans they evaluated included dental checkups for kids.

A relief, you say? Don’t breathe too deeply just yet. There is a comment period until January 31, 2012, when anyone can submit a comment or opinion to HHS. After that, HHS will make some final decisions about these benefits.

If you care about this issue, you should read this comprehensive bulletin or this HHS bulletin and submit a comment via email to [email protected]. You can also read about essential benefits in my blog for The Huffington Post and get more detail about the 10 categories of benefits in this site’s Obamacare section.

Dr. Linda Bergthold has been a health care consultant and researcher for over 25 years.  She worked on the Clinton Health Reform plan and was the head of the Obama health care blog team in 2008.  She also writes for  The Huffington Post on health reform and insurance issues.

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