Despite that title, our blog is not converting to the
abbreviated language of texts and Twitter–I promise to type out the words in full when they’re needed. We’re also definitely not moving with Twitter speed in
bringing you the news, but on February 17, the Centers for Medicare and
Medicaid Services released a frequently asked questions (FAQ) document on the
essential health benefits (EHB). It
clarifies some of the points in the agency’s EHB bulletin from December. The FAQ covers a range of issues
that fall into the categories of benchmark options, state mandated benefits,
and EHBs in Medicaid. We wanted to
bring you a number of key points in case you’re behind in your reading list of
sub-regulatory guidance from federal agencies:
Benchmark options
* States may not choose separate benchmark plans for the
individual and small group markets–there must be one benchmark for
private-market plans. States may,
however, choose a separate benchmark plan for Medicaid benefits that are required
to include the EHBs–see below.
* The benchmark plan benefits selected this year will
apply in 2014 and 2015, even if the underlying plan’s benefits change in the
future. As stated in the original
bulletin, CMS will review its overall essential health benefit approach for
2016.
* As suggested in the bulletin, insurers will have the
ability to substitute benefits within the 10 required EHB categories as long as
the substitutions are actuarially equivalent. In the FAQ, though, there is no mention of substituting
benefits across categories.
* States, on the other hand, may not create a benefit
package separate from one of the benchmark choices and have it approved by the
Secretary (as in Medicaid or CHIP), even if it is actuarially equivalent to one
of the benchmark choices.
* The preventive services required to be covered by the
ACA and mental health parity required by other federal law will apply to EHB
benefits.
State mandates
* States will be required to defray the cost of any
mandated benefits that are not included in the state’s essential health
benefits. While most of the
benchmark options will include state mandates, there are situations in which a
mandate may not be included. For
instance, a certain mandate might apply only in the individual market, not in
the small group market. If a state
chose a small group market benchmark and did not otherwise include the mandate
in its EHB package, it would need to defray the cost of this individual market
mandate. The FAQ does not provide
further info on how these costs would be computed or paid by states.
* State benefit mandates enacted after December 31, 2011
would not be part of the state’s EHB package in 2014 and 2015, unless they were
already included in the benchmark plan.
EHBs in Medicaid
* For Medicaid, benefits for newly-eligible enrollees
must be consistent with existing Medicaid law (Sec. 1937), which allows for
three benchmark plan options–the largest non-Medicaid HMO, any state employee
health plan, or a certain federal employee plan–as well as Secretary-approved
coverage. States will ALSO choose,
through a state plan amendment, an EHB benchmark for Medicaid from any of the
ten allowable choices, which while overlapping are not the same as the Sec. 1937
options.
* Once this benchmark choice is made, the state will need
to make sure that its Medicaid EHBs, like those for the private market, include
all of the ten categories of services required by the ACA. Medicaid benefits for the
newly-eligible will be those benefits that are included in the Sec. 1937
benchmark, supplemented if necessary to include the Medicaid EHBs. We’re still awaiting more in-depth
guidance on this interaction of benchmarks in Medicaid, so stay tuned.
We continue to be troubled by the allowance for insurer
flexibility in the EHBs, especially when states are not being given flexibility
to set a higher benefits standard.
In addition, the FAQ mentions that while the ACA bars annual and
lifetime dollar limits on benefits, plans will be able to set limits that
aren’t based on the amount of dollars expended, like limits on the number of
visits or days of treatment. But
in noting that these non-dollar limits should be actuarially equivalent to the
dollar limits they’re replacing, it seems that enrollees will be no better
off. We hope CMS will further
clarify that this won’t be a loophole that allows plans to reestablish dollar
limits by another name.
The February FAQ gives us a few more answers on the
essential health benefits, but a lot of questions remain. Nonetheless, states will need to move
forward quickly to study their benchmark options and make a choice by the third
quarter of 2012. Check back for
more updates on this process–we’ll share what’s happening both from the federal
government and the states.