Comment Deadline 1/31/12
January 17, 2012 -- In a December bulletin, the U.S. Department of Health and Human Services (HHS) proposed to give states wide discretion to set their own essential health benefits (EHB) standard for health plans sold through the new exchanges. Not having a a clear-cut, comprehensive federal standard will likely result in significant disparities in coverage across states. Please send comments to EssentialHealthBenefits@cms.hhs.gov (through January 31, 2012).
Urge HHS to:
- Create a national standard for essential health benefits instead of providing such wide flexibility to the states. By failing to adopt clear regulations, the ACA cannot be implemented in a way that fulfills its intent -- that coverage be sufficiently comprehensive to meet the needs of people with mild, moderate and severe mental illnesses and substance-use disorders.
- Clearly define, at a minimum, the mental health and substance abuse benefit, including the requirement for parity with other medical/surgical benefits. This standard-setting is not only important to consumers but is key to ensuring stability and fairness in the insurance market.
- Make specific provision for coverage of at least some of the psychiatric rehabilitation home and community-based services that are required for children and adults with more severe conditions. Without such provision, a high burden will fall on the state and local public mental health systems that are already overwhelmed.
The Details
Under the Affordable Care Act (ACA), all health insurance plans offered through newly created state health insurance exchanges are required to offer a package of essential health benefits (EHBs) outlined in the ACA. EHB requirements also apply to Medicaid benchmark plans (i.e., plans modeled on a private plan’s benefit package) for the Medicaid expansion population in states that opt to offer Medicaid benchmark plans instead of their regular Medicaid coverage. The ACA specifies that the EHB must include mental health and substance abuse coverage at parity with other medical/surgical care. The ACA also requires plans to cover prescription drugs, rehabilitation, habilitation, preventive/wellness and chronic care management services, as well as ambulatory, maternity, newborn, pediatric, hospital and laboratory services.
While the ACA established the categories of services that must be covered, it did not specify the services under each category. Instead, the ACA directs the Secretary of the U.S. Department of Health and Human Services (HHS) to establish EHB parameters through regulation.
On December 16, 2011, HHS released a bulletin that outlined its proposed regulatory approach to EHBs and invited the public to submit comments. According to the bulletin, HHS plans to let each state determine their EHB by allowing them to choose which of the following four types of plans will set the standard or benchmark:
- Any one of the three largest, small group insurance plans;
- Any one of the three largest state employee health benefit plans;
- Any one of the three largest Federal Employees Health Benefit Plans (FEHBPs); or
- The state’s largest commercial Health Maintenance Organization (HMO) plan.
If a state does not pick a benchmark plan, the largest plan in the state’s small group market will become the default.
Problems with this Approach
If HHS adopts the approach outlined in the bulletin, states will decide the EHB for plans in their states and, in all likelihood, the extent and quality of coverage will vary significantly from state to state. If a state picks a plan from among allowable choices that is the skimpiest, consumers may not receive the array of services needed. The requirements in the ACA that mental health and substance abuse treatment must be covered in the EHB means that all plans will have to cover some services for mental health and substance use disorders. These services will most likely be physician services, psychotherapy, medications and inpatient hospital services.
What is less clear is what states will require when it comes to services that have not been covered by many commercial insurers in the past, such as rehabilitation -- and, in particular, psychiatric rehabilitation, which includes recovery-oriented services that help individuals avoid or minimize impairments in functioning due to mental illnesses. These services include independent living and social skills training, supportive services that allow individuals to maintain housing and employment and promote health and wellness, as well as those that help children function in the home, school and community.
The question of whether adults with serious mental illnesses and children with serious emotional disturbances will have coverage for a comprehensive array of services that are needed for recovery cannot be answered in the absence of a clear definition of the EHB. Without a clear-cut, comprehensive federal standard, consumers will face an uncertain future and will be more likely to have difficulty accessing needed services. How states define coverage and how state insurance department regulators interpret the law will affect consumers significantly. States that have a hands-off approach to insurance regulation will likely have a low bar for the test of what is sufficient coverage.
Because mental health and substance abuse coverage has historically been less standardized across insurance products, if the coverage was available at all, this is an area that needs more national guidance than other areas of the EHB. HHS could go a long way in limiting the problems inherent in this new approach if it clearly set the requirements for services for mental health and substance-use conditions.
Too much flexibility in the benefit requirements will lead to problems, such as adverse selection and confusing and deceptive marketing practices by insurance companies. The lack of standardization would reward insurance companies that cut corners, thus creating a disincentive for an improved health insurance marketplace.
Please comment (EssentialHealthBenefits@cms.hhs.gov) by January 31, 2012.