States, Not Feds, to Determine Essential Benefits

Cheryl Clark, for HealthLeaders Media , December 19, 2011

Political observers and news reports, however, said the administration may be trying to void criticism and fear that it would foist a Beltway-designed version of quality care on states that have a very different idea what that should be. Such concerns may be the foundation for state challenges to the Affordable Care Act, now under review by the U.S. Supreme Court.

But Sebelius touted the expanded coverage that will be available with inclusions from these 10 general categories. She said that the law will prevent plans from having "gaping holes in coverage, missing preventive benefits to annual limits that could mean your insurer stopped paying for care just when you needed it the most."

Under the proposal, which was issued in the form of a "bulletin" to describe how HHS and CMS intend to issue the proposed and final rule next year, states would select existing health plan coverage within these 10 categories as "benchmarks." The idea would be similar to the way states set up their Children's Health Insurance Programs.

They could choose one of the following:

  1. One of the three largest small group plans in the state
  2. One of the three largest state employee health plans
  3. One of the three largest federal employee health plan options
  4. The largest HMO plan offered in the state’s commercial market

If the chosen plan does not include services or items in all 10 categories, the state could fill those gaps from another plan. If the state chooses not to go forward with an exchange, the federal government will run the exchange but the decisions about what those options include will still be made by that state's Legislature, administration officials said.

The Obama administration also postponed critical decisions on cost-sharing, such as the amounts of deductibles, co-payments or co-insurance, and whether each state will have the authority to choose its own minimums or maximums. Those will be addressed in a future bulletin, HHS officials said.

The White House was encouraging stakeholders to make comments on its bulletin here by Jan. 31.

In a statement, Neil Trautwein, chairman of the Essential Health Benefits Coalition and vice president at the National Retail Federation, said in a statement that "the devil will be in the details."

"The bulletin leaves unanswered the question of affordability in the states, he said.   "Employers, health plans, and state governments should have as much flexibility as possible in order to design and choose plans that are affordable and meet the needs of American families."




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