According to the Coalition, providing flexibility in selecting a benchmark plan will help assure that states can tailor benefits to meet their residents’ health needs. Of equal importance is the need to ensure availability of high-quality, affordable coverage options. Making certain that EHB packages do not put the cost of coverage beyond the reach of small businesses, their employees and individuals must be a central objective, the EHBC contended.
The Coalition offered the following considerations:
- Adopt Institute of Medicine (IOM) Premium Target Recommendation. In its report to HHS, the IOM recommended setting a premium target that reflects the current average cost of a small-business health insurance plan as the benchmark for determining the inclusion of specific benefits in the EHB package. The Coalition strongly agrees with the IOM that currently available small group coverage should guide the EHB package.
- Avoid including benefits not typically offered under small group plans. Benefits included in the benchmark should include only those typically offered under small group plans. To help ensure coverage affordability, expanding these benefits beyond the minimum necessary to comply with the law should be avoided.
- Allow Private Sector Strategies to Achieve Greater Benefit Value and Affordability; Avoid Applying Medicare Requirements. Private sector benefit design, medical management and care delivery approaches have helped achieve greater benefit value and affordability. The Coalition strongly urges HHS to ensure that health plans can continue to use these strategies employed in the commercial market and not to apply Medicare requirements, which would limit plans’ ability to craft and implement innovative strategies to improve quality, outcomes and value.
Other considerations recommended include:
- Apply cost and medical effectiveness considerations to all benefits, including state mandates. Development of the EHB package should incorporate evaluations of benefits, including state benefit mandates, from both a cost and medical effectiveness perspective. The Coalition recommends that in order to ensure affordability, HHS encourage states to undertake a review of their most costly benefit mandates, using the method described by the IOM in its recommendations to HHS on defining EHBs, and exclude state-mandated benefits that lack a strong evidence-base after the transition period (2014 to 2015).
- Ensure affordability by allowing health plans to make a “good faith” determination of whether or not a benefit included in the benchmark is essential for purposes of applying annual limits. The February “Frequently Asked Questions (FAQ)” document indicates that HHS will prohibit annual dollar limits on any benefit, including state-mandated benefits, in the benchmark, although the FAQ indicates that health plans would be permitted to impose non-dollar limits that are at least actuarially equivalent to the annual dollar limits. To ensure affordable coverage, the Coalition urges HHS to permit health plans to make a good faith determination of whether the benefits offered in the state benchmark, including state-mandated benefits, are essential (i.e., fall within the 10 statutorily-required essential health benefit categories). If a health plan determines in good faith that a benefit is not essential (does not fall into one of the 10 categories), the health plan may apply annual dollar limits on that benefit. If a health plan determines that a benefit is essential, the health plan may not apply annual dollar limits on that benefit.
- Permit flexibility in determining actuarially equivalent benefits. The EHB Bulletin provides that health plans will be required to offer benefits that are “substantially equal” to the benefits in the benchmark plan. To ensure affordable coverage, the Coalition urges HHS to adopt rules that allow the maximum amount of flexibility in determining reasonable substitutions that have an actuarially equivalent value to the benefits in the benchmark plan.
The Coalition—composed of groups representing employers, pharmacy benefit managers and health plans across America—has previously cautioned that an expansive essential health benefits package would force employers to absorb higher health care costs at the expense of creating new jobs and increasing wages; pass more costs onto their workers; or stop offering health coverage altogether. For employers who do not currently offer coverage, an expansive essential benefits package would put affordable coverage further out of reach.
The Coalition maintains there are four essential criteria that HHS’ final essential benefits package must satisfy:
- The essential health benefits package must be affordable. It should provide basic services that Americans need to protect their health, not expansive coverage that is unaffordable for individuals or small employers.
- The package must be flexible. It should give individuals and employers the choice to purchase a range of plans and options, and it must allow for flexibility in insurance design and cost-sharing arrangements.
- The package should make it easier for employers to offer, and individuals to obtain coverage. The economy needs businesses to grow and hire more workers—a benefits package that is too expensive will hinder business and job growth.
- The package must consider all costs associated with its development. Taxpayer costs will greatly increase if more employers are priced out of offering coverage, further threatening America’s fiscal future.
Generally, non-grandfathered insured plans in the small group market, as well as plans offered through an Exchange, will be required to offer essential health benefits beginning in 2014 (see “SECOND OPINIONS: Which Health Plan Benefits Are ‘Essential’ under PPACA?”). In addition, all group health plans (both insured and self-funded) are prohibited from imposing lifetime or annual dollar limits on essential health benefits.