The Center for Consumer Information and Insurance Oversight (CCIIO) pleased health insurers, employer groups and some consumer group representatives last week when it emphasized flexibility in an Essential Health Benefits Bulletin.
Drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) put the essential health benefits (EHB) provision — Section 1302(b) — in PPACA in an effort to keep health insurers from coming up with ways to game the system.
Otherwise, EHB proponents say, health insurers could tailor benefits to appeal only to healthy applicants.
The CCIIO’s parent, the U.S. Department of Health and Human Services (HHS), is thinking about letting each state come up with its own EHB package by basing the EHB package on the package of benefits available through one of the state’s most popular small group plans, government plans or non-Medicaid health maintenance organization plans.
Supporters of that approach say it could ensure that each state’st EHB package suits the needs of that state’s residents. Critics say it could lead to a confusing patchwork quilt of clashing standards.
Sara Collins of the Commonwealth Fund, New York — a strong supporter of the goals of PPACA — suggests in a blog entry that too much of the wrong kind of flexibility could interfere with consumers’ efforts to compare plans.
“It will be critical that HHS balances the desire of states and health insurers to determine what benefits are included with the law’s intended goal of providing consumers and employers in every state with comprehensive and clearly defined health insurance coverage options,” Colllins says.
PPACA calls for new health insurance distribution exchanges to help individuals and small groups use new tax subsidies to shop for coverage by offering menus of standardized plans. An exchange is supposed to offer 4 tiers of coverage, with each tier defined in terms of the percentage of EHB package actuarial value that it covers.
One of the goals of the PPACA exchange provisions “is to facilitate informed consumer choice, so that enrollees can be assured that plans within a tier offer comparable coverage and will be able to select plans with lower premiums without being concerned that cheaper plans have less adequate benefits,” Collins says.
If HHS lets states tinker with EHB rules too much, variation in benefits could put clouds over the windows and keep consumers and employers from understanding what benefit plans really offer, Collins says.