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January 2012 St@teside

State-Centric Approach to the Essential Health Benefits

On December 16, 2011, the U.S. Department of Health and Human Services’ (HHS) Center for Consumer Information and Insurance Oversight (CCIIO) issued a bulletin on the Essential Health Benefits (EHB), and further guidance is expected. The EHB provision of the ACA directs the HHS secretary to define EHB requirements related to products sold in the individual and small group market, both inside and outside of a health insurance exchange; for Medicaid benchmark and benchmark equivalent plans; and to a state’s Basic Health Program, if a state chooses to create one. The EHB has to cover 10 statutory categories: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services (including behavioral health treatments), prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventative and wellness services and chronic disease management, and pediatric services (including oral and vision care).

The bulletin identified ten potential benchmarks states can use to define the EHB:

  • A state’s largest plan by enrollment in any of the three largest small group insurance products in its small group market;
  • Any of the largest three state employee health benefits plans by enrollment;
  • Any of the largest three national Federal Employee Health Benefit Plan (FEHBP) options by enrollment; or
  • A state’s largest insured commercial (non-Medicaid) Health Maintenance Organization (HMO).

If a state fails to select a plan, the bulletin recommends that the largest plan by enrollment in the largest product in the state’s small group market will be the fallback. HealthReformGPS, a joint project of the Robert Wood Johnson Foundation and George Washington University's Hirsh Health Law and Policy Program, has written a summary that provides more detailed information on the bulletin. Comments are due to HHS by January 31, 2012.

Moving forward, states need to assess which of the bulletin’s 10 benchmark health plan options will best serve their population. Particularly, states will need to assess how the available benchmark options cover services in the 10 statutory categories. The Office of the Assistant Secretary for Planning and Evaluation (ASPE) at HHS published a report comparing benefits of the three largest FEHBP plans with a summary of benefits available in the small group market and state employees’ health benefit plans. HHS has also released a list of the three largest small group products by state to help states choose a benchmark plan. This list, along with ASPE’s report, can be used by states as a template for their own state specific benchmark plan option comparisons.

States also will need to maintain a transparent decision-making process for all stakeholders. A couple of states have started to gather input by holding stakeholder meetings to discuss the EHB bulletin and the state’s decision-making process. On January 18, 2012, the Colorado Department of Insurance (CDOI) and the Colorado Health Benefit Exchange (COHBE) held its first of many stakeholder meetings to review the process behind selecting a benefit package. A big question for the state is figuring out who will make the final decision on the EHB package—the state legislature, exchange board, or insurance department. Comments on the bulletin were drafted jointly by CDOI and COHBE staff and will be finalized by the COHBE Board prior to submission. Minnesota has also released a public call for comments on the EHB bulletin. The state’s Department of Commerce, Department of Health, and the Exchange Advisory Board are requesting stakeholder input to inform their formal comments to the administration.