The Department of Health and Human Services will give states more leeway in what it expects insurers must offer as "essential health benefits" in their plans for individuals and small groups.
The policy that HHS proposed Dec. 16 will give states the flexibility to select a plan that would be equal in scope to the services covered by a typical employer plan in their state. States and insurers would retain the flexibility to change the benefits package over time as different and innovative plan designs are developed and advancements in care become available and meet the needs of consumers.
The Affordable Care Act, which provides for all Americans to have access to quality and affordable health insurance, assures that individual and small group health insurance plans must offer a comprehensive package of products and services known as "essential health benefits." This applies to those plans offered both inside and outside of the state health insurance exchanges scheduled to launch in 2014.
HHS published the guidance to signal its strategy that will be detailed in its final rule and to give consumers, states, employers and insurers information as they work toward establishing health insurance exchanges and making decisions for 2014.
The public can comment on HHS' proposed essential health benefits approach until Jan. 31, 2012. The final rule is expected to be released sometime next year.
"Permitting flexibility would provide greater choice to consumers, promoting plan innovation through coverage and design options, while ensuring that plans providing essential health benefits offer a certain level of benefits," HHS said in its bulletin.
Under HHS' intended approach, states would have the flexibility to select an existing health plan to set the foundation or "benchmark" for the items and services included in the essential health benefits package.
States would choose one of the following health insurance plans as a benchmark:
• One of the three largest small group plans in the state;
• One of the three largest state employee health plans;
• One of the three largest federal employee health plan options;
• The largest HMO plan offered in the state's commercial market.
This approach was developed with input from the public and reports from the Labor Department, the Institute of Medicine and research conducted by HHS.
"Under the Affordable Care Act, consumers and small businesses can be confident that the insurance plans they choose and purchase will cover a comprehensive and affordable set of health services. Our approach will protect consumers and give states the flexibility to design coverage options that meet their unique needs," said HHS Secretary Kathleen Sibelius in the announcement.
The benefits and services included in the health insurance plan selected by the state would be the essential health benefits package. Plans could modify coverage within a benefit category so long as they do not reduce the value of coverage.
States must ensure the essential health benefits package covers items and services in at least 10 categories of care, including preventive care, emergency services, maternity care, hospital and physician services and prescription drugs. If a state selects a plan that does not cover all 10 categories of care, the state will have the option to examine other benchmark insurance plans, including the Federal Employee Health Benefits Plan, to determine the type of benefits that will be included in the essential health benefits package.
"In addition to assuring comprehensive coverage for the newly insured, many millions of Americans buying their own insurance today will gain valuable new coverage, including more than 8 million Americans who currently do not have maternity coverage, and more than 1 million who will gain prescription drug coverage." said Sherry Glide, HHS assistant secretary for planning and evaluation.
The bulletin addressed only the services and items covered by a health plan. Future documents will consider cost sharing features, such as deductibles, co-payments, and co-insurance, and cost-sharing rules will determine the actuarial value of the plan, HHS said.