Essential Health Benefits Balancing Coverage and Cost (2012) / Chapter Skim
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4 Resolving ACA Intent
4 Resolving ACA Intent
Pages 59-78
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From page 59... ...
benefits should be focused on medical ones. Through an array of statutory provisions involving the 10 categories of care, the typical employer plan, consid eration of state mandates, and various other requirements, the ACA provides legislative guidance for the contents of the EHB.
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From page 60... ...
Although the basic benefit package is currently available and being purchased, "most people purchase benefit packages in excess of the basic requirements."4 Others pointed to the basic mandatory vs. optional services under Medicaid as an example of 1 See the committee's workshop publication for further discussion, Perspectives on Essential Health Benefits.
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From page 61... ...
. 5 The ACA as amended expressly prohibits listing abortion as an essential health benefit (§ 1303(b)
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From page 62... ...
Nonetheless, it appears the typical employer plan will have to be expanded to accommodate the 10 categories of care. The statute permits the Secretary to add more categories, by saying the EHB package must include "at least" the 10 broad categories of care.
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From page 63... ...
Employers buy insurance products on behalf of their employees and under budgetary constraints, and they are acutely aware of the fact that each dollar spent on health insurance premiums is a dollar that cannot be allocated to wages or other benefits (Emanuel and Fuchs, 2008)
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From page 64... ...
Conclusion: The committee concludes that scope of benefits of a typical employer plan needs to be thought of not only as the listing of benefits but also as what is paid by the subscriber for those benefits. Without some constraint on the size of the EHB package, the premium prices faced by individuals seeking to obtain coverage both inside and outside of the exchanges in the individual and small business market may prove unaffordable to the target population and diminish access to health insurance coverage.
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From page 65... ...
If specificity has these advantages, what degree of regional or local variation in EHB definition should be allowable? In testimony to the committee, the director of the California Department of Managed Health Care cau tioned, based on experience with state requirements for managed care, that very broad categories in the authorizing Knox-Keene Act left too much undetermined and thus resulted in many state mandates to clarify intent (DMHC, 2011)
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From page 66... ...
. Beyond this simple distinction are more nuanced differences in the degree to which employers offer health insurance coverage, whether the EHB package will apply to the plans offered by firms of different sizes, and the degree of uninsurance among their employees, all of which can be important to defining typical in the context of health insurance expansion under the ACA.
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From page 67... ...
In the 2010 KFF and HRET Annual Employer Health Benefits Annual Survey, more than half of the respondents cited cost of health insurance being too high as the reason for not offer ing it (Holve et al., 2003; KFF and HRET, 2010a)
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From page 68... ...
. Although employer contributions have an apparent impact on the premium cost seen by an individual employee, in fact, the entire cost of health insurance premiums -- like all other employee benefits -- are ultimately taken from employee wages.
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From page 69... ...
Attempts to distinguish differences in benefits by employer size met data limitations beyond that experienced by the DOL's survey of plan documents, but what data are available show little difference in the scope of ben efits by firm size; instead benefit design factors play a larger role. The DOL Bureau of Labor Statistics' National Compensation Survey, collected from a sample of 3,900 employers, was able to yield data on coverage of 10 different services by employer size -- outpatient and inpatient surgery, physician office visits, hospital room and board, chiropractic, home health care, skilled nursing facility, hospice care, biofeedback, and homeopathy (BLS, 2009)
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From page 70... ...
. In summary, health insurance premiums are determined by a number of factors including the population covered by a plan, the expansiveness of coverage, the benefit design, and underlying medical and insurance prices depending on the competitiveness of the local market.
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From page 71... ...
21 Prior to the passage of the ACA, states were the primary regulators of the content of health insurance policies. The committee was asked to consider what role, if any, existing state mandates should play in defining essential health benefits.
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From page 72... ...
Addition ally, the FEHBP national fee-for-service plans do not have to incorporate state mandates, but can pick up state mandates as a negotiated benefit. Debate Over State Mandates State mandates have been a controversial element of health insurance regulation.
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From page 73... ...
However, doing so may be seen as being contrary to the ACA's statutory language, which clearly contemplates requiring states to pay the increased premium cost that results from state mandates that exceed essential health benefit requirements. It would also result in drastically unequal definitions of essential health benefits among the states and would essentially require the federal govern ment to subsidize state policy choices.
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From page 74... ...
takes a broad view of expenditures that could be included as allowable deduct ible medical expenses (Harmon, 2011; Pratt, 2004) , 25 but this seems less applicable to the context of defining the EHB given that the IRS definition goes well beyond the kinds of expenses that are typically covered by any type of private health insurance plan.
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From page 75... ...
2010. Online questionnaire responses submitted by Carmella Bocchino, Executive Vice President, America's Health Insurance Plans to the IOM Committee on the Determination of Essential Health Benefits, December 6.
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From page 76... ...
2011. Online questionnaire responses submitted by Abigail Coursolle, Greenberg Traurig Equal Justice Works Staff Attorney, Western Center on Law & Poverty to the IOM Committee on the Determination of Essential Health Benefits, March 11.
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From page 77... ...
2010. Online questionnaire responses submitted by Michael Maves, Chief Executive Officer and Executive Vice President, American Medical Association to the IOM Committee on the Determination of Essential Health Benefits, December 20.
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From page 78... ...
2010. Online questionnaire responses submitted by Julie Stoss, Vice President, Government Relations, Kaiser Permanente to the IOM Committee on the Determination of Essential Health Benefits, December 6.
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