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Essential Benefit Politics

A Political Minefield

What is an essential benefit--and what isn't--is a political and medical minefield, with far-reaching consequences. Should health insurance plans be required to cover chiropractic visits? Should there be a limit on the number of physical therapy sessions a patient gets? What about cancer treatments? Health care reform policymakers and medical experts are struggling with these questions right now. The Department of Health and Human Services (HHS) is required to design an essential benefits package as required by the Affordable Care Act (ACA).

Affordability vs Interest Groups

There's a constituency for every disease, and lobby groups pressing for a range of mandates--from rich maternity care coverage to expansive mental health services to expensive kidney transplants. But HHS must aim for a careful balance between an inclusive package and an affordable, flexible one. Since the ACA requires people to buy insurance, regulators have to be mindful of the price tag their essential benefits package will carry. There will certainly be some very difficult and controversial exclusions. There's both an obligation to make insurance affordable, This directly conflicts with our desire to make insurance generous.

There's no easy answer!

That definition will have direct implications on the kind of health insurance coverage available through Covered California in 2014. Any insurer that wants to participate in the exchange will have to offer at least the basics, as set out in HHS's definition. Medi-Cal must cover these services by 2014 as well.

HHS Passes to States

It was expected that Department of Health and Human Services (HHS) regulations would further specify essential benefits at the federal level, but in mid-December 2011 HHS announced that it was passing the responsibility for defining essential benefits to the states. The HHS guidance says states can define their own set of essential benefits by using an existing major health benefit plan in the state as a benchmark. Covered California has chosen to use the Kaiser Permanente HMO 30 Plan - the largest small-group employee health benefit plan by enrollment in the state.

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