This morning, the Institute of Medicine began its second day of deliberations into defining what would constitute “essential health benefits” under the Affordable Care Act. Even though the law identifies general categories that insurers will have to cover beginning in 2014 — emergency services, mental health care, outpatient and inpatient care — these meetings are designed to help HHS reach more specificity on the issue. The agency is also required to ensure that the scope of essential health benefits “is equal to the scope of benefits provided under a typical employer plan.”

During this morning’s second session, John Kingsdale — the former director of the Massachusetts Connector Authority — predicted that defining “essential health benefits” will be “one of the more challenging parts in implementing the ACA” and warned the agency against “overreaching” in detailing which benefits insurers will have to provide:

KINGSDALE: The nation is highly divided by this and so whatever is put into the essential health benefits package that can be portrayed by those who tend to oppose ACA as unfairly burdening those employers or individuals, who want a different benefit package will be used as political fodder to tear down the ACA and I strongly believe that overreaching…could doom implementation. [...]

There is a tendency to think about benefits in the context of negotiation for something more someone else would pay for and I think it continually surprises people to understand, ‘oh there are real people who cannot afford what we consider to be an ideal benefit package and they actually have to pay for it in premiums. ….This was very much about giving people decent coverage as opposed to primarily a policy of it just being about raising the standards of coverage and it seems to me when you have to make close calls about benefits, it’s important to return to that principle. Secondly, obviously, most benefits cost dollars no matter what you will hear about how they will save money and that the ACA will live or die on affordability. And thirdly, that there is a fair degree of consensus about minimum benefit steps and so that you will find most states don’t even mention most of the things that are covered typically by commercial insurance and there are additionally very few benefits that significantly improve [inaudible] or save dollars. So, I think it’s not difficult to find that essential minimum benefits package and then, as you can tell from my other principles, I would advise you to be very conservative about adding on to it. [...]

My experience suggests revisiting and learning from cases and some flexibility and even phasing in would all be very helpful as you go down the path of defining a minimum benefit that will be extremely controversial.

Indeed, as CQ Healthbeat reported, it’s still unclear “if officials will seek a specific list of treatments or ask insurers to mirror benefits in particular plans, such as the Federal Employee Health Benefits Program.” Either way, they will have to balance Kingsdale’s suggestions with the concern that too loose of a definition would allow insurers to design plans differently — possibly even in such a way that would lead to adverse selection.

IOM will publish recommendations for HHS “by September, and HHS will issue its proposed rules by the end of the year, giving insurance companies time to adjust plans before the provisions take effect.”

Former Minnesota governor and potential presidential candidate Tim Pawlenty (R) thought he was laying out a conservative vision of government and health reform during his speech at the National Press Club today, but he inadvertently made the case for the Affordable Care Act, which he would like to repeal. Watch it:

Let’s go through his claims one by one:

1) CLAIM 1– MORE TRANSPARENCY/KNOWLEDGE NEEDED: “If you have a system where people get to consume things without knowledge and responsibility about making wise choices about price and quality and the provider has no incentive other than to provide more volume of whatever is being consumed or given and the myth is the bill goes somewhere else and that it is all free, that is a system that I assure you is doomed to fail. That unfortunately is most of government, it is particularly most of health care system.”

FACT 1 — The new HealthCare.gov, which is probably the most successful element of the law thus far, allows families and individuals to compare plans in their geographic areas bases on price, quality, benefits — that’s the “knowledge” part. By 2014, consumers will enter more organized state-based exchanges — or new insurance marketplaces — where insures will have to offer a standard benefits package that are even easier to compare. Here comes “responsibility”: Americans will have to purchase an insurance policy to ensure that the bill does not “go somewhere else” or is shifted throughout the system. That pretty much busts the “myth” that “it is all free.”

2) CLAIM 2 — HEALTH COSTS ARE OUT OF CONTROL: “If you look at what’s driving much of government spending for cities, for school districts, for counties, for states, for the federal government, it is indeed the health care issues. It is driving budgets at a pace that exceeds almost everything else. And if we don’t solve this problem, really solve this problem, it will take down the country or at least impair it from within.”

FACT 2 — Health care costs are increasing government spending and the Affordable Care Act will slow the rate of growth for health spending. A September report from the Center for Medicare & Medicaid Services (CMS) found that while the government will spend more on care during the initial period of coverage expansion, once the cost savings and efficiencies kick in, costs will “decelerate.” Moreover, the actuaries predicted that as a result of these savings, Medicare spending will decline $86.4 billion from previous projections due to reforms. “Specifically, average annual Medicare spending growth is anticipated to be 1.4 percentage points slower for 2012–19 than we projected in February 2010. By 2019, it is projected to grow 7.7 percent—0.9 percentage point more slowly than we projected in February 2010,” the report concluded.

3) CLAIM 3 — PROVIDERS HELD ACCOUNTABLE FOR RESULTS: “We need to have systems where consumers, or at least purchasers are in charge. They have user-friendly information about price and quality. That the providers of the service have incentive to do more than just provide volume. That they have to be held accountable for better results and better health and that the money is in alignment in those goals.”

FACT 3 — For an example of “user-friendly” information click over to HealthCare.gov and see Fact 1. The law also addresses the complaint that our health care system rewards quantity over quality by establishing demonstration projects that experiment with different ways of paying providers so that they don’t have an incentive to over-prescribe services or medications. Specifically, it allows providers organized as accountable care organizations (ACOs) that voluntarily meet quality thresholds to share in the cost savings they achieve for the Medicare program and has created an Innovation Center to test, evaluate, and expand in Medicare, Medicaid, and CHIP different payment structures and methodologies to reduce program expenditures while maintaining or improving quality of care.

Pawlenty may wish to tweak some of these provisions to reflect his more conservative ideology, but he wants you to believe that reform doesn’t begin to address any of these concerns and instead gives everyone a free ride on the government’s dime.