Essential Health Benefits Balancing Coverage and Cost (2012) / Chapter Skim
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5 Defining the EHB
5 Defining the EHB
Pages 79-102
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From page 79... ...
Before insurance products that are required to incorporate the essential health benefits (EHB) can be devel oped, the Secretary of the Department of Health and Human Services (HHS)
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From page 80... ...
BOX 5-1 Steps in Recommended Process for Defining an Essential Health Benefits (EHB) Package 1.
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From page 81... ...
The committee is guided by the unam biguous direction of Section 1302 to start with a commercial health insurance benefit; however, it suggests that the Secretary compare, in particular, how Medicaid plan benefits for habilitation and mental health and substance abuse services compare with commercial plans that currently include such services. For example, Maryland has requirements to cover habilitative services in children under the age of 19 in its Comprehensive Standard Benefit Plan for Small Businesses although the small business products are not subject to all state-mandated benefits (Maryland Insurance Administration, 2009; MHCC, 2011)
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From page 82... ...
First, and most importantly, cost provides a useful mechanism to help frame tradeoffs between competing options for inclusion in a benefit package. In fact, the law makes clear that the essential health benefits should reflect the scope of a typical employer plan, and typical employers commonly use premiums as a key element in deciding on the benefit package they will offer employees.
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From page 83... ...
Although the committee selects the small group market as the basis for establishing the essential health benefits, it is worth noting that the EHB definition will also apply to policies in the individual market. Based on its microsimulation model, the CBO also estimated the effects of the law on premiums for individual policies, as shown in Table 5-2.
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From page 84... ...
would choose to enroll in Medicaid. This analysis suggests that the Secretary may have to take into account some of the design choices being made by states in incorporating costs into the determination of essential health benefits.
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From page 85... ...
Combined Risk Pool Individual Small Group (2014 $) Bronze 5,379 3,855 4,600 Silver 6,401 4,588 5,474 Gold 7,462 5,348 6,381 Platinum 8,561 6,138 7,323 national average premium price for a particular metal level, such as the silver plan, would be reasonable because this is the premium price that is used to determine the amount of subsidy for which an individual is eligible.
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From page 86... ...
The distribution of resulting premium prices in different locales will reflect the other elements that determine the cost of health insurance: health status of enrollees, propensity to use services, provider payment rates, network design, and medical management. However, the committee's guidance to the Secretary is to establish the initial package of essential health benefits that are actuarially equivalent to a national average TABLE 5-6 Sample Approach to Incorporating Costs into the Definition of Essential Health Benefits Process Result from Step Updated Result Starting amount from fixed target sources $5,474-$6,933 $5,474-$6,933 estimated to reflect a silver plan Change due to expanding scope of benefits +$168 $5,642-$7,101 to any of the required 10 categories not included in small employer plans today Obtain actuarial estimates of the incremental Dollar amounts by individual areas of Components of overall premium price cost of each proposed additional element in coverage provided as an actuarial "price list" the scope of benefits Conduct public deliberative process to set Package selected to fall within Final description of the scope of essential priorities budgeted range health benefits eligible for coverage Final result: benefit package with a estimated $5,474-$6,933 national average premium 4 Note: The modeling by the CBO and RAND does not typically discriminate the inclusion or exclusion of specific small service categories; deductibles and co-payments are the main drivers of the premium prices observed and/or generated in these models.
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From page 87... ...
STEP 3: RECONCILE INITIAL LIST TO THE PREMIUM TARGET The central debate in constructing the EHB package has been balancing the comprehensiveness of benefits with their costs so as to promote value. This is not an academic exercise but one that has real repercussions for how many people will be able to afford the premium -- because the essential health benefits apply to individual and small group policies both inside and outside the exchanges.
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From page 88... ...
In the absence of specific secretarial guidance on coverage, the resulting packages offered in exchanges will likely vary considerably with respect to what is considered an essential benefit. In contrast, benefit design considerations (e.g., provider network arrangements, medical management, deductibles)
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From page 89... ...
for fee-for-service plans operating within the Federal Employees Health Benefits Program (FEHBP)
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From page 90... ...
Recommendation 1: By May 1, 2012, the Secretary should establish an initial essential health benefits (EHB) package guided by a national average premium target.
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From page 91... ...
The EHB should incorporate a spectrum of care that meets the evidence-based needs of the varied medical conditions and services that a diverse population of patients requires. In response to the committee's online query about balance and diversity, various approaches to assessing performance on these dimensions were suggested.7 Both employers and insurers tended to support having balance across categories defined by a marketplace norm of typical employer plans.
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From page 92... ...
Respondents to the committee's online question about diverse segments of the population frequently interpreted the provision as addressing the question of disparities in access across racial, ethnic, language, and socioeconomic lines. If a plan failed to attract a reasonable number of beneficiaries in a given clinical or demographic group, it might be evidence of an imbalance in benefit design.
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From page 93... ...
Respondents to the committee's online ques tion about the issue of setting limits on benefit categories could be simplistically split into two groups: those in favor of benefit limits and those against benefit limits. Those in favor of limits noted that they are an important component of value-based benefit design and are necessary to ensure quality and affordability.
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From page 94... ...
Chapter 7 outlines the importance of planning for data collection on benefits, benefit design, limits imposed, and monitoring implementation. At the outset, state health exchanges and state regulators will be able to com pare what is being typically offered in their states under the EHB requirements and identify outlier practices for covered benefits, exclusions, and benefit design limits and networks.
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From page 95... ...
Conclusion: The secretarial guidance could require that the legislative language of the fifth required element be incorporated directly into contract provisions in order to participate as a qualified health plan. Similarly, state insurance commissioners could require this for plans outside the exchange that incorporate the EHB.
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From page 96... ...
Nor does the Federal Employee Health Benefits Program require participating plans to have a single definition.15 13 Personal communication with Linda Bergthold, health policy consultant, November 19, 2010. 14 Kaminski reports that if a "state-enacted definition is more expansive than the settlement's definition, the state law will control.
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From page 97... ...
Medical Purpose Additionally, in light of the importance of medical necessity determinations during implementation of the EHB package and concerns about inappropriate denials of care, the committee examined the element of "medical purpose of the intervention," which had been raised as particularly problematic because its phrasing in medical necessity definitions and, more importantly, in its interpretation as applied to patient cases can result in limitations of care. Although the committee heard anecdotal accounts of denials of care based on narrow interpretations of the wording of definitions of medical necessity, the extent of the problem was not well documented.
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From page 98... ...
. Medical necessity reviews are where the tough decisions on coverage are made, and having more light shed on clinical policies and review criteria would enhance understanding of whether EHB coverage needs to be updated and if there are areas potentially subverting the intentions of the required elements for consideration.
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From page 99... ...
based on the best scientific evidence, taking into account the available hierarchy of medical evidence; and (3) likely to produce incremental health benefits relative to the next best alternative that justify any added cost.
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From page 100... ...
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 101... ...
2010. Online questionnaire responses submitted by Joe Touschner, State Health Policy Analyst, Georgetown Center for Children and Families to the IOM Committee on the Determination of Essential Health Benefits, December 6.
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From page 102... ...
2010. Online questionnaire responses submitted by Carolyn Zollar, Vice President for Government Relations and Policy Development and Martie Kendrick, External Council, American Medical Rehabilitation Providers Association to the IOM Com mittee on the Determination of Essential Health Benefits, December 6.
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