The Center for Consumer Information and Insurance Oversight (CCIIO) says in an Essential Health Benefits Bulletin released today that major medical benefits standards should reflect the benefits typically offered by small employers.
The CCIIO, an arm of the U.S. Department of Human Services (HHS), says HHS officials have accepted the recommendations made by a panel of experts at the Institute of Medicine (IOM), Washington, that the EHB should “balance comprehensiveness and affordability for those purchasing coverage.”
HHS intends to propose that each state pick a benchmark plan and use that plan to define the EHB package for its residents.
The Children’s Health Insurance Plan and some state Medicaid programs already use that approach, CCIIO officials say in the bulletin.
“A major advantage of the benchmark approach is that it recognizes that issuers make a holistic decision in constructing a package of benefits and adopt packages they believe balance consumers’ needs for comprehensiveness, affordability, and state flexibility and to reflect public input received to date,” officials say.
Drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) put the EHB provision — Section 1302(b) — in the act in an effort to ensure that all legal U.S. residents have a minimum level of health coverage and to keep major medical issuers from using skimpy benefits packages to offer lower prices than competitors or chase away applicants with health problems.
If PPACA takes effect on schedule and works as drafters expected, the act will create new health insurance distribution exchanges in 20214. The exchanges will help individuals and small groups use new tax subsidies to buy health coverage. Individuals, small groups and large groups will also continue to be able to buy coverage from carriers in the traditional commercial health insurance market.
Some commenters have asked whether the EHB will apply to all non-grandfathered plans or only plans sold through the exchanges.
CCIIO officials say the EHB standards will apply to “non-grandfathered plans in the individual and small group markets both inside and outside of the exchanges” beginning in 2014.