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.”