“Essential Health Benefits” details
On February 2013 the department of Health and Human services released a set of instructions on what will be deemed as the minimum necessary amount of services or health benefit coverage each non-grandfathered insurance plan must provide starting January 1, 2014 to its members.
The Affordable Care Act referred to as Obamacare requires that all health care plans purchased in and out of the Health Insurance Exchange as well employer plans established after March 2010 offer a comprehensive minimal set of services and benefits to all customers, these benefits are now known as “Essential Health Benefits”. The purpose of this guideline is to ensure all plans provided on the exchange and in small groups provide a minimal level of benefits to all members. While the federal government have place these requirements on all health care plans, they have also provided each state a certain level of flexibility with how these essential benefits will be implemented in a News Release provided by the department of HHS.
The Affordable Care Act requires everyone with the exception of few individuals to have a health care coverage plan that provides EHB. If an individual does not meet one of the define exemption set by the department of Health and Human services they will be charge a share service cost/ Health Insurance Tax. There are many questions regarding what are Essential Health Benefits.
How will Essential Health Benefits be determined?
According to the news release by the department of HHS, each state 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. A state can and will choose one of the following health insurance plans listed below 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.
The benefits and services included in the health insurance plan selected by the state would be the essential health benefits package. A Plan can modify coverage within a benefit category as long as they do not reduce the value of coverage.
The goal of the proposal provided by the department of HHS gives each state the flexibility to select a plan tat would be very similar to what a typical employer in that state would provide.
What are the Essential Health Benefits categories?
All insurance policies will be required to provide these services within the following categories in order to be certified and offered on the Health Insurance exchange, additionally all state plans that provide Medicaid must cover these services by January 1, 2014.
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
In the past, the three Essential Health Benefit categories below have not generally been covered under most typical employer plans:
- Habilitative services
- Pediatric oral services
- Pediatric vision services
All insurance plans will now have to provide coverage for these benefits. If a state’s benchmark plan does not cover one or more of these essential benefit categories, then the Department of HHS suggest that particular state supplement their benchmark pan with one of the following option:
If the states benchmark plan does not include coverage for habilitative services, then the health care plan must include coverage for habilitative services in one of the following methods:
(1) Cover habilitative services at parity with rehabilitative services [physical therapy (PT), occupational therapy (OT) and speech therapy (ST)], or
(2) Decide which habilitative services to cover and report that decision to HHS,
The department of HHS will evaluate and further define habilitative services in the future If the states benchmark plan does not include coverage for pediatric dental and/or Vision, then the plan must be supplemented by the addition of pediatric dental and vision services as provided under:
(1) The Federal Employees Dental and Vision Insurance Program (FEDVIP) Dental plan and FEDVIP vision plan with the largest national enrollment, or
(2) The state’s Children’s Health Insurance Program (CHIP)
In general these details are crucial in establishing the framework of the Affordable Care Act and as the details are released were starting to get more and more specifics on how the requirements will play out. Prior to this release the IRS in conjunction with the departement of HHS also released the requirements establish for the purchase of health care plans, and the individual mandate shared service costs
Will Essential Health Benefits cause an increase in premiums ?
Many group and associations are praising the department of HHS after its release of this information, over the last several years various studies have indicated that less than 2% of current health plans provide the essential Health benefits that will now be required under the Affordable Care Act, consequently insurance companies can no longer charge more, or exclude any pre-existing conditions which is one of the reason these benefits will help provide quality health care at a reasonable price to the market states supporters of the requirements.
While certain groups praise the department of HHS, there are many insurance groups that are cautioning against the increase in benefits and the comprehensive list of minimum essential health benefits that are now required. The insurance groups claims the services provided are far more extensive than the coverage that 98% of the current health plans on the market offer, and these new requirements will cause a sharp increase in premiums. These groups caution of the probability of sharp increase in premium for young, healthy individuals purchasing health care plans starting in 2014.