What to Expect When Health Plans Have to Cover the ‘Essentials’

Health reform has been strongly urging plans to cover the essential health benefits (EHB) package, and that means there will have to be coverage in 10 categories of health benefits.

The Centers for Medicare and Medicaid Services (CMS) gave examples of what to expect under the state-based approach to defining EHB by giving examples and interpretations in this document.

CMS published a list of the three largest small-group coverage options in the state, which while not binding, not an endorsement and only for illustrative purposes … the list surely contains many of the companies that will be drawing up their states’ future EHB package. (The Essential Health Benefits Bulletin last Dec. 16 gave states flexibility in choosing which benefits models would be dubbed essential.” One option open to states is to determine it by choosing one from among the three largest small group products based on enrollment.)

This set of Q & As from Feb. 18 says there can be only one essential benefit package, and states that vote to require coverage above the federal essential benefit must defray the additional cost.

There are 10 mandatory categories, and the agencies predict many plans will have to create new coverage for: (1) pediatric oral services, (2) pediatric vision services and (3) habilitative services.

To make the adjustment to covering 10 bases, an expansion of coverage can be compensated with an actuarially equivalent reduction in another benefit, the Feb. 18 Q & A describes. Plans can shift coverage of services among the several benefit categories required, so long as substitutions are actuarially equivalent, and do not violate Federal, or any other, statutory provisions:

For example, a plan could offer coverage consistent with a benchmark plan offering up to 20 covered physical therapy visits and 10 covered occupational therapy visits by replacing them with up to 10 covered physical therapy visits and up to 20 covered occupational therapy visits, assuming actuarial equivalence and the other criteria are met.

The 10 categories are: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision.