MedCity Influencers, Sponsored Post

Essential benefits and the battles to come

By: Dan McLaughlin This post is sponsored by UST Health Care. A key part of […]

By: Dan McLaughlin
This post is sponsored by UST Health Care.

A key part of the Affordable Care Act (ACA) is the creation of state-based Health Insurance Exchanges to offer individuals and small business a standardized health insurance product. These policies will resemble benefit packages of small employers. Each of these health plans in the Exchange must provide an “essential benefit set” of services. But what does that mean?

In 1993 President Clinton’s task force on healthcare reform decided to define the essential benefit set as part of his healthcare reform proposal. A significant amount of the opposition to his plan was from provider groups that were excluded.

In 2010 the architects of the Affordable Care Act took this lesson to heart and developed a multi-step process which would define the essential benefit set of services over a number of years. First, the Institute of Medicine was asked to develop a process and guidelines for the initial development of and long-term updates to the benefit set. Their report was recently released and can be found here.

The second step is to define the essential benefit set; this will be done by HHS staff and their recommendations will be available in May, 2012. HHS has had a reasonably good track record of resisting pressure from provider groups to expand the Medicare benefit set significantly, so this initial set should meet the cost goals of the ACA.

A third component of the process allows state exchanges to modify the essential benefit set if the results are actuarially equivalent in cost. Here is where the challenge begins and the states’ history regarding benefits is not encouraging.

Most states currently have “mandated benefits” for fully insured products within the state. Over the years various provider groups have lobbied for the inclusion of their services into the mandated benefits which have made this type of insurance very expensive. Most reasonably sized companies have become “self-insured” to escape these mandates. For example:

Source: Perspectives on Essential Benefits — Workshop Report — Institute of Medicine

Because of this history, look for intense state legislative battles in the coming years among providers as they lobby to ensure their services are included as essential benefits. The actuarially equivalent definition will undoubtedly be stretched and vigorously debated. Some of the benefits that have been controversial in the past include:

  • Cosmetic surgery
  • Chiropractic care
  • Dental care
  • Care that is supportive but not clinical
  • In vitro fertilization
  • Experimental services, particularly drugs
  • And many more . . . .

Each state will face this challenge as they create their Health Insurance Exchange and they will struggle to keep the cost of health insurance affordable — which is, of course, the name of the law.

See how Minnesota is facing this challenge and others related to the implementation of health care reform at the UST Executive Conference on the Future of Health Care on Friday, October 28 in Minneapolis, MN.

This article is also available on the High Performance Health Care blog of the University of St. Thomas Center for Health and Medical Affairs. Dan McLaughlin is the Director of the Center for Health and Medical Affairs at the University of St. Thomas, Opus College of Business.


UST Health Care

This post appears through the MedCity Influencers program. Anyone can publish their perspective on business and innovation in healthcare on MedCity News through MedCity Influencers. Click here to find out how.

Shares0
Shares0