HHS relaxes state requirements in healthcare reform law
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PPACA sought to ensure that health insurance plans offered in the individual and small group markets, both inside and outside of the Affordable Insurance Exchanges, offer a package of items and services, known as “essential health benefits.”
The bulletin described a new proposal, and informed stakeholders about HHS' intended approach to rulemaking to define essential health benefits. HHS also is releasing this intended approach to give consumers, states, employers and issuers timely information as they work toward establishing exchanges and making decisions for 2014. This approach was developed with significant input from the public, as well as reports from the Department of Labor, the Institute of Medicine and research conducted by HHS.
“Under PPACA, 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.
Under the HHS’ intended approach, 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; and
- The largest health maintenance organization (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 now would 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.
The policy proposed by HHS would give states the flexibility to select a plan that would be equal in scope to the services covered by a typical employer plan in their state. "States and insurers would retain the flexibility to evolve the benefits package with the market as innovative plan designs are developed and advancements in care become available, and meet the needs of their citizens," the agency said.
The Dec. 15 bulletin addressed only the services and items covered by a health plan, not the cost sharing, such as deductibles, copayments and coinsurance. The cost-sharing features will be addressed in future bulletins and cost-sharing rules will determine the actuarial value of the plan.
HHS said it welcomes public input on this proposal, which can be sent to: EssentialHealthBenefits@cms.hhs.gov. Comments are due by Jan. 31, 2012.
For a summary of individual market coverage as it relates to essential health benefits, click here.