Why Define an Essential Benefits Package?

1. Why Define an Essential Benefits Package? • A key goal of ACA is to improve access to health insurance coverage. • It included a number of changes to the way the existing health insurance market works to make coverage more broadly available to everyone. • In order for these market reforms to function effectively, ACA includes a requirement for everyone to have health insurance coverage. • This means that it is necessary that we define what the minimum level of coverage is to meet this requirement.

2. How are people covered today? • The vast majority of people who already have health insurance coverage today are covered by their employers, both large and small • Employer coverage in both the small and large group market is extremely comprehensive • In December of 2011, NAHU conducted a survey of our membership regarding the benefits included in group health plans.

3. NAHU Survey • The survey indicates that people with employer sponsored coverage receive emergency care and hospital care under every health care plan. • Follow up care such as in patient rehab, nursing facilities, and hospice care are covered by 97, 93 and 90 % of small group plans respectively. • Prenatal, delivery and infant care along with organ transplants and prescriptions are also covered by nearly every plan.

4. The Benchmark plans • The use of benchmarks highlights the already comprehensive nature of employer sponsored coverage today. • The benchmarks do not create absolute uniformity, due to the variety of potential plan selections, and the difference in mandates from state to state. • Some have speculated that some states may even have benchmarks that continuously change between now and 2014, as state legislatures add new state required benefits. • The HHS bulletin indirectly says that mandates will be retained at their current level, but additional clarification is needed in this area.

5. More on State Mandates • Using benchmarks allows states to more quickly create the qualified plans that must be offered through the Exchange in 2014. • The disadvantage of this approach is that state mandates differ widely from state to state. • Not all of the mandates required by states have been demonstrated to be both cost-effective and evidence based. • Additionally, benchmark plans may include items and services outside of the 10 categories specified by ACA.

6. Essential benefits and Affordability • One of the most commonly asked questions related to implementation of health reform relates to affordability. • Employers are concerned about whether they will be able to continue to offer coverage to their employees. • Employees are concerned about whether they will be able to afford their share of the cost of coverage. • Individuals are concerned about whether benefit requirements will increase their costs. • If cost is not taken into account, it will be difficult for small employers and individuals to continue to purchase coverage. • The result could be diminished access to care and soaring public health care costs, despite the best intentions of ACA to avoid these outcomes.