All Things in Moderation

HHS has been making a big deal about how “flexible” the essential health benefits requires are for states.   Sure, it’s very flexible.  They can choose from column A or column A1.

States would have the flexibility to select an existing health plan to set the “benchmark” for the items and services included in the essential health benefits package.  States would choose one of the following health insurance plans as a benchmark:

•  One of the three largest small group plans in the state;
• One of the three largest state employee health plans;
• One of the three largest federal employee health plan options;
• The largest HMO plan offered in the state’s commercial market

States can modify coverage within a benefit category, but they have to cover items and services for the following 10 categories of care: (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.

So, states have the “flexibility” to craft a benefit package that is based on the existing plans in their state and must include a statutorily mandated list [Section 1302(b)(1) of the ACA] of benefits.   States can tweak the specific benefits in each category but can not reduce the value of coverage.   And God help you if you try, for example, to change a formulary to cover a generic vs. a brand name, or institute step-therapy in that prescription drug category.

As far as the ability to craft a unique policy, that ability just isn’t there.  HHS admits as much in its recently released guidance.

Generally, according to this analysis, products in the small group market, State employee plans, and the Federal Employees Health Benefits Program (FEHBP) Blue Cross Blue Shield (BCBS) Standard Option and Government Employees Health Association (GEHA) plans do not differ significantly in the range of services they cover. They differ mainly in cost-sharing provisions, but cost-sharing is not taken into account in determining EHB. Similarly, these plans and products and the small group issuers surveyed by the IOM appear to generally cover health care services in virtually all of the 10 statutory categories.

The HHS analysis found that the differences among plans are minor.  Some plans cover or don’t cover acupuncture, bariatric surgery, hearing aids, and smoking cessation programs and medications.   So Mississippi can strike a blow for federalism by telling HHS, no, we’re not covering acupuncture.

Where there might be some differences now will be eliminated.  Not every state mandates coverage for behaviorial health treatment.  Now it is number 5 on the “must cover”  list.

Basically, the differences will be on the edges, minor and will address how something will be provided.  For example, pediatric dental plans may be wrapped into a medical benefit.  Or they can be sold as stand-alone plans.   That’s an issue that will be worked out on state-by-state basis.   But I don’t think that makes it more or less “flexible” for states.

States also have varying definitions of the various mandated benefit categories.  What “habilitative services and devices” isn’t necessarily consistent across state lines.  But, in general, it’s for physical therapy (PT), occupational therapy (OT), and speech therapy (ST).  Differences might be who qualifies (meaning what medical condition) and at what level of cost sharing for such benefits.   I don’t consider that flexibility.

Not all states current mandate coverage for the 10 categories (mostly  habilitative services, pediatric oral services, and pediatric vision services) .   While HHS is considering how to best rectify this, the law and HHS are very clear on this point: they will be covered.   How is TBD, but the guidance (linked below) lays out some options and basically tells state to pick an existing plan coverage, for example, the Federal Employees Dental and Vision Insurance Program, and graft it onto their “flexible” state plan.

States do have some flexibility within a benefit category, but only to a point.  States can adjust benefits within a category subject to a baseline set as reflected in the benchmark plan.

Here’s the kicker: Section 1302(b)(4)(G) and (H) direct the Secretary to periodically review and update EHB.  Translation.  Those 10 mandated benefit categories can become 20 if we want them to be.   Also, look for those categories to be more clearly defined through regulatory capture guidance.   Want to make sure a plan covers a specific treatment?   Gather data, hire a good lobbyist and you too can have your benefit become essential.

Full HHS guidance here. [Note:  opens PDF]

And if you missed it, Sebelius was on the Daily Show to talk about the ACA.   Bonus points for work-related Daily Show viewing.   Link at KHN.

[Apologies to Mark for taking so long with this. ]

Filed under: Affordable Care Act, health insurance | 41 Comments »