Even as the House of Representatives takes time to re-debate the Affordable Care Act
, many organizations are hard at work implementing the new law. Last week, an Institute of Medicine panel held a two day meeting to help develop recommendations on essential health benefits that will form the basis for state-based exchange coverage, Medicaid
coverage for newly-eligible adults, and the Basic Health coverage that states can adopt under the ACA.
This is an extremely important issue and can go a long way in helping children and families realize the full potential of the Affordable Care Act. Those covered through state exchanges will be able to choose from among the private plans offered in each exchange while those newly eligible for Medicaid or a Basic Health plan will receive the benchmark benefits chosen by their state leaders. In both cases, the ACA guarantees that each plan will offer at least the essential health benefits. But which benefits are essential?
The ACA provides a list of ten categories of services that must be included in the essential health benefits, including pediatric services with oral and vision care. The law also requires that the essential benefits be comparable to the typical employer sponsored plan.
Beyond this rough outline, the ACA charges the Secretary of HHS with determining the details of the essential health benefits. The Secretary, in turn, has asked the Institute of Medicine
(IOM) to advise her on the process for making that determination. That’s why the IOM panel held its first meeting to take testimony on how the essential health benefits should be determined. It heard from a wide variety of stakeholders, including Congressional staff who helped draft the law, insurers, state officials, an economist, providers, and others. The committee will be considering the comments and its report is not expected for some time, but a number of themes emerged from the meeting:
- Several speakers urged both the IOM and the Secretary to be modest and avoid “overreach” in determining the essential health benefits. Congressional staffers pointed to President Clinton’s Health Security Act, which took over 60 pages to describe the benefits individuals would receive. The staffers argued that such a detailed list is unworkable, so the IOM should focus on principles for coverage and the Secretary should develop a meaningful, but reasonably limited set of required benefits.
- Economist Jonathan Gruber of MIT stressed that in determining the required benefits, there is an inescapable trade off between the scope of benefits and their cost. A relatively rich benefit package will both cost the government more than a more limited package and would also cost many families more in cost-sharing, especially those who choose the lower-premium Bronze plans in the exchanges.
- In regard to the requirement for comparability with the typical employer plan, several speakers made reference to the nation’s largest employer-sponsored plan, the Federal Employees Health Benefit Plan (FEHBP).
Some speakers, though, pointed out that other models may be more appropriate for children. David Schwartz of the Senate Finance Committee staff observed: “In addition to looking at models like the FEHBP, for children’s benefits, obviously, there’s the Medicaid package.” Representatives from the American Academy of Pediatrics and the American Medical Association also referenced Medicaid’s Early Periodic Screening Diagnosis and Treatment (EPSDT) benefit package as the best model for children’s benefits.
Those charged with determining the essential health benefits have a tough job. John Kingsdale, who led the development of Massachusetts’ health insurance exchange, called determining the minimum benefits the most challenging piece of implementing that state’s reforms. But it’s a vitally important job; the essential health benefits will set the floor for what services are available to millions of children and families under the ACA.
It’s important to remember, though, that the essential health benefits will be a floor and not a ceiling. Exchange plans are intended to compete with each other by offering additional benefits to supplement the essential package. State policymakers will have the authority to provide more benefits to newly eligible Medicaid or Basic Health plans beneficiaries if they choose.
So the essential health benefits are an important first step and reference point for determining the level of coverage that will be offered, but aren’t the only factor in creating benefit packages.
Stay tuned for more updates as this key part of health reform implementation continues!