Essential Health Benefits, Part 2

This is the second of a 2-part series on the development of the essential health benefit (EHB) package prescribed under the Patient Protection and Affordable Care Act. The previous commentary provided an overview of EHBs.¹ This commentarydiscusses establishing an EHB package to meet the needs of those who use healthcare services the most—people with chronic diseases and disabilities.

The primary purpose of the Patient Protection and Affordable Care Act (PPACA) is to help individuals get the care they so desperately need. One of the law’s mandates is the development of a new federal standard that will serve as a minimum requirement for determining essential health benefits (EHBs) that all healthcare plans offered through state health insurance exchanges must provide.

PPACA requires the Secretary of the Department of Health and Human Services to establish an EHB package that is equal to the scope of benefits provided under a typical employer plan. The Standard Option offered by BlueCross BlueShield to federal employees and members of Congress is an often-mentioned benchmark for the 10 minimum categories of services mandated under PPACA (

Table

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Mandated benefits provide protection for insured populations, but they also can impede a health insurer’s ability to offer affordable healthcare coverage options. Patient advocacy organizations are pragmatic enough to know the EHB package cannot cover every desired service; there will be limits. It is certain that each additional benefit in one category will likely bring corresponding reductions elsewhere.

The end goal is to strike a balance between covering what people require in order to live healthier lives and providing an affordable benefits package. If we make EHB requirements too limited, we jeopardize people’s health. If we make EHB requirements too exhaustive and the plans too rich in scope, we price insurance coverage beyond a patient’s ability to pay, resulting in a new class of the uninsured. Research by the Agency for Healthcare Research and Quality shows that the percentage of individuals who spend 10% or more of their family income on out-of-pocket expenditures for healthcare rose from approximately 16% in 2001 to more than 19% as of 2005. There is an even greater burden on people with chronic conditions.²

COMPREHENSIVE YET FLEXIBLE

As I pointed out in the previous Patient Advocacy column, the Secretary of Health and Human Services has 3 possible options for determining the EHB package: (1) to define benefits narrowly, (2) to define categories of benefits broadly with process-oriented requirements for developing coverage policies, or (3) to define categories of benefits broadly and allow plans to determine coverage within the categories.

Narrowly defining the benefits could ensure greater accountability for health plans. However, such an approach would also limit the flexibility of health insurance plans to adapt to changes based on evolving clinical evidence, as well as restrict the plan’s ability to accommodate advances in technology. At the same time, granting insurers too much flexibility creates the risk that plans will exclude vital services from the package, even those that are evidence based.

The logical middle ground is to first set a baseline of services that cover the care continuum provided by a variety of healthcare professionals to meet a broad spectrum of patient needs, particularly the needs of people with chronic diseases and disabilities, who account for more than 75% of all healthcare costs in the United States.³ In addition, the criteria should incorporate a variety of care settings, including services that are delivered by skilled nursing facilities, home health, and hospice.

Next, the federal government should layer on top of this baseline the flexibility to add to or change the EHB package to recognize individual needs such as provision of habilitative care for children with autism and services for adults with early-onset Alzheimer’s disease, accommodation of technological advances and evolving clinical evidence, and provision of optional services. For example, additional services could be provided through the use of special needs plans. A person’s care requirements change over time, which is why accommodating a continuum of care is essential. Likewise, the needs of individuals with chronic diseases or disabilities will change as their conditions progress, and they rightly deserve the flexibility to decide what care is required and what services they are willing to either give up in exchange or pay for in addition to the baseline EHB package.

SET THE CRITERIA, THEN THE COST

In cooperation with its patient advocacy organization members, the National Health Council hired an actuary to analyze the services included in a model EHB package and the potential costs. Further analysis will help identify whether the selected model’s list of services is satisfactory in terms of coverage and affordable for those expected to enroll. This analysis will also help us to examine possible changes in the list to meet the needs of people with chronic conditions.

As a starting point, we used the BlueCross BlueShield Standard Option to establish a baseline EHB package. We are in the process of determining the premium price for the package and then will evaluate whether the price is affordable for people with chronic conditions to ensure that access to EHBs by individual patients is not impeded by financial barriers. According to the Kaiser Family Foundation, workers on average paid in 2010 nearly $4000 toward the cost of family health coverage.⁴

As Jonathan Gruber, an economist at Massachusetts Institute of Technology, has pointed out, “We are imposing a mandate that individuals buy insurance, so there is an obligation to make that insurance affordable.”⁵

Instead of looking at the benefits package in stark black and white terms—that is, what services patients can or cannot receive through the health exchanges—the EHB dialog should consider the broader question of what services patients should be able to access. With this mind-set, we can openly discuss how much of a service is covered, who is financially responsible for services, and what is the appropriate cost-share balance.

I can guarantee today we will not get a perfect EHB plan. If we think creatively, we will develop an EHB package that can evolve and improve over time.

Under PPACA, the Secretary of Health and Human Services must periodically review the EHB package and provide a public report that contains an assessment of whether enrollees are facing any difficulties accessing needed services for reasons of coverage or cost; an assessment of whether the EHB needs to be modified or updated to account for changes in medical evidence or scientific advancement; information on how the EHB package will be modified to address such opportunities; and an assessment of how modifications to the EHB will affect costs and actuarial limitations.⁶

An open, transparent process will be critical to ensuring that the patient perspective is incorporated in the development of measures used to create and evaluate the EHB package. We must set the baseline of services before discussing healthcare costs in order to open the dialog to creative options for meeting the needs of people with chronic conditions.