The Essential Health Benefits Coalition (EHBC) has released recommendations concerning how essential benefits should be defined under the Patient Protection and Affordable Care Act (PPACA).
Establishing essential benefits will determine the minimum standards health plans must meet, affecting insurance across the nation whether the policy is an individual one or made available through employee benefits. The Department of Health and Human Services (HHS) received the EHBC's recommendations, which stress the importance of flexibility in selecting a benchmark plan. That will make it easier for states to establish benefit requirements that serve their residents. The coalition also emphasized the need to ensure that essential benefits are not too expensive for small businesses, employees and individuals.
Toward those ends, the EHBC recommends excluding benefits that are not typically part of small group plans, and favors benefits set at the minimum necessary amounts for the sake of affordability. Additionally, the coalition supports the Institute of Medicine in its suggestion that small group plans be used as the basis for determining a reasonable premium target.
The EHBC also recommended that regulators allow health plans to use commercial market strategies related to benefit design, medical management and care delivery approaches, rather than relying on Medicare requirements. Other recommendations focus on cost and affordability, with some attention to effectiveness as well.
How to design essential health benefits
The EHBC suggests that, whatever form the final determination of essential health benefits takes, it must fulfill a few key requirements. One is that the package must be affordable, or else it will hinder the intent of health reform and make it more difficult for people to have coverage, rather than less so. A second need is flexibility, so that individuals and employers will have options and cost-sharing or plan design can be adjusted to serve the needs of the consumer.
Another factor is the ease of obtaining coverage. The package should make it as easy as possible for individuals to secure coverage and for employers to offer it while meeting its other goals, according to the EHBC. Finally, the coalition notes that the costs must be fully analyzed so that the insurance market, healthcare industry and consumers do not suffer.
It remains to be seen how much these recommendations might sway officials as they seek to establish beneficial requirements for insurance. Employee benefit consultants may be able to help businesses understand and cope with the changes to healthcare and insurance that are coming in the years ahead.
