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.
CCIIO officials say the EHB must ensure compliance with PPACA coverage requirements and other federal coverage requirements, such as the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which requires employers that offer mental health and substance abuse treatment benefits to provide the same level of coverage for behavioral health care and general health care.
CCIIO officials list 4 types of plans that could be benchmark plans:
- The largest small group plan in any of the three largest small group insurance products in a state’s small group market
- Any of the largest three state employee health benefit plans.
- Any of the largest three national Federal Employees Health Benefit Plan options.
- The largest insured commercial non-Medicaid health maintenance organization operating in the State.
States can “select a single benchmark to serve as the standard for qualified health plans inside the Exchange operating in their state and plans offered in the individual and small group markets in their state,” officials say.
Like members of the IOM panel, CCIIO officials talk specifically about the percentage of health plans that offer benefits for coverage for procedures such as in vitro fertilization and Applied Behavioral Analysis (ABA) therapy for children with autism.
Officials note that requiring in vitro fertilization benefits appears to increase overall health premiums by about 1%, and that requiring ABA therapy benefits appears to increase overall premiums by about 0.3%.
Janet Trautwein, chief executive of the National Association of Health Underwriters (NAHU), Washington, said NAHU is encouraged by the general approach of the bulletin but wants more details, and especially a list of the treatments that every major medical policy must cover.
“Health insurance agents and brokers work well in advance with their employer clients on designing a health plan,” Trautwein says.
The faster producers get the covered treatment list, the easier it will be for producers to help customers get affordable coverage that will suit their needs, Trautwein says.
Correction: An earlier version of this article described NAHU’s location incorrectly. NAHU has moved to Washington.