Question: Will the essential benefits package apply to plans outside the Exchange as well as inside?
Answer: The essential health benefits package is aimed at ensuring that health plans in individual and small group markets offer a minimum of coverage, both inside and outside of health benefit exchanges, scheduled to take effect in 2014. Care must be taken to ensure that identical rules apply to health insurance benefits regardless of where they are sold to avoid adverse selection. Comparable benefit packages must be offered both in or out of the Exchange, otherwise, sicker patients will gravitate toward the market where more comprehensive coverage is sold. To the extent the rules are different outside the Exchange versus inside, there is room for market manipulation. California will need to consider how strongly to link rating rules inside and outside.