In a surprise move, the Obama Administration has announced that each state can decide what “essential health benefits” will be offered in their state Health Care Exchanges beginning in 2014. Under the Affordable Care Act it was assumed that health benefits would be mandated at a federal level making health coverage consistent across the country. This change may have been politically motivated to avoid fights with Republican controlled states and other advocacy groups.
“Under the Affordable Care Act, consumers and small businesses can be confident that the insurance plans they choose and purchase will cover a comprehensive and affordable set of health services,” said HHS Secretary Kathleen Sebelius. “Our approach will protect consumers and give states the flexibility to design coverage options that meet their unique needs.”
Under the Department’s intended approach announced today, 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.
The benefits and services included in the health insurance plan selected by the state would be the essential health benefits package. Plans could modify coverage within a benefit category so long as they do not reduce the value of coverage. Consistent with the law, states must ensure the essential health benefits package covers items and services in at least ten categories of care, including preventive care, emergency services, maternity care, hospital and physician services, and prescription drugs. If a state selects a plan that does not cover all ten categories of care, the state will have the option to examine other benchmark insurance plans, including the Federal Employee Health Benefits Plan, to determine the type of benefits that will be included in the essential health benefits package.
Source: Health and Human Services, News Release – Dec 16, 2011