Essential health benefits

In the context of health care in the United States, essential health benefits (EHBs) are a set of benefits that certain health insurance plans are required to cover for patients.[1]

Essential health benefits must be offered by health plans in individual and small group markets, both inside and outside of the Health Insurance Marketplace.[2][3] Large-group health plans, self-insured ERISA plans, and ERISA-governed multiemployer welfare arrangements not subject to state insurance law are exempt from the EHB requirement.[4]

History

Coverage of essential health benefits was first required by the Patient Protection and Affordable Care Act (PPACA or ACA) of 2010, which was a major piece of health care reform legislation.[1] The EHB provisions of the ACA was an amendment to the Public Health Service Act.[5]

Dr. Shana Alex Lavarreda, the director of health insurance studies for the UCLA Center for Health Policy Research, explains that before the ACA's passage, U.S. health insurance sector experienced "a race to the bottom, with insurers cutting benefits to lower premiums."[1] The establishment of essential health benefits "set a standard for insurance. Anything below that is not true health insurance."[1] The EHB requirement came into effect on January 1, 2014.[1]

Essential health benefits

The ACA sets forth the following ten categories of essential health benefits,[6][7] at Section 1302(b)(1) of the Affordable Care Act, codified at 42 U.S.C. § 18022(b):[8]

(A) Ambulatory patient services. [outpatient care]
(B) Emergency services.
(C) Hospitalization. [inpatient care]
(D) Maternity and newborn care
(E) Mental health and substance use disorder services, including behavioral health treatment.
(F) Prescription drugs.
(G) Rehabilitative and habilitative services and devices.
(H) Laboratory services
(I) Preventive and wellness services and chronic disease management;
(J) Pediatric services, including oral and vision care.

The essential health benefits are a minimum standard: "Qualified health plans are not barred from offering additional benefits, and states may require that qualified health plans sold in state health insurance exchanges also cover state-mandated benefits."[9]

The ACA's list of essential health benefits is defined in terms of ten broad classes.[10] The act gives "considerable discretion" to the Secretary of Health and Human Services to determine, through regulation, what specific services within these classes are essential. However, the Act provides certain parameters for the secretary to consider. The secretary (1) must "ensure that such essential health benefits reflect an appropriate balance among the categories ... so that benefits are not unduly weighted toward any category"; (2) may "not make coverage decisions, determine reimbursement rates, establish incentive programs, or design benefits in ways that discriminate against individuals because of their age, disability, or expected length of life"; (3) must take into account "the health care needs of diverse segments of the population, including women, children, persons with disabilities, and other groups"; and (4) must ensure that essential benefits "not be subject to denial to individuals against their wishes on the basis of the individuals’ age or expected length of life or the individuals' present or predicted disability, degree of medical dependency, or quality of life."[11]

According to a Commonwealth Fund report in 2011:

As it stands, federal regulations for 2014 and 2015 do not establish a single, nationally uniform package of health services. Instead, the U.S. Department of Health and Human Services (HHS) gave states discretion to determine the specific benefits they deem essential. This approach was well-received by many state officials, who valued the opportunity to tailor benefit standards to reflect state priorities, and by insurers, who retained more control over benefit design. Groups representing consumers and providers were less supportive, however, expressing concern that the degree of flexibility found in the rules undermines the law's promise of consistent, meaningful coverage.[12]

Comparison with minimum essential coverage

Essential health benefits should not be confused with minimum essential coverage (MEC). MEC is the minimum amount of coverage that an individual must carry to meet the individual health insurance mandate, while EHBs are a set of benefits that qualified health plans (QHPs) must offer.[13] MEC is a low threshold; many forms of coverage that do not provide essential health benefits are nevertheless considered minimum essential coverage.[13]

Notes

  1. 1 2 3 4 5 Frank Lalli, The Health Care Law's 10 Essential Benefits: The Affordable Care Act ensures you'll have access to these medical and wellness services, AARP The Magazine (August/September 2013).
  2. ↑ Essential Health Benefits, HealthCare.gov (accessed November 12, 2015).
  3. ↑ Rosenbaum, Teitelbaum & Hayes, p. 2.
  4. ↑ Rosenbaum, Teitelbaum & Hayes, p. 3.
  5. ↑ Rosenbaum, Teitelbaum & Hayes, p. 2.
  6. ↑ 10 health care benefits covered in the Health Insurance Marketplace, HealthCare.gov (accessed November 12, 2015).
  7. ↑ Alexandra Ernst, 10 Essential Health Benefits Insurance Plans Must Cover Starting in 2014, FamiliesUSA (March 28, 2013).
  8. ↑ 42 U.S. Code § 18022 - Essential health benefits requirements
  9. ↑ Rosenbaum, Teitelbaum & Hayes, p. 3.
  10. ↑ Rosenbaum, Teitelbaum & Hayes, p. 3.
  11. ↑ Rosenbaum, Teitelbaum & Hayes, pp. 3-4
  12. ↑ Giovannelli, Lucia & Corlette, p. 2.
  13. 1 2 Susan Grassli & Lisa Klinger, Understanding the Difference between Minimum Essential Coverage, Essential Health Benefits, Minimum Value, and Actuarial Value, Leavitt Group (January 27, 2014).

Sources

External links

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