Cath Lab Digest

In an unexpected announcement, the US Department of Health and Human Services (DHHS) issued a bulletin on December 16, 2011, allowing states to choose the items and benefits that health plans must offer as part of regulations included in the Patient Protection and Affordable Care Act (ACA).

Beginning in 2014, insurers that want to offer plans in the small business and individual marketplaces are required to include certain essential health benefits. States will select an existing health plan as the benchmark that the new plans must follow. DHHS said formal regulations will be announced later, as will information on deductibles, copayments, and coinsurance.

Rather than specific items and benefits, DHHS released a list of mandatory general categories that must be part of the new plans: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

For the benchmark, states can choose among the state’s 3 largest small group plans, the 3 largest state employee plans, the 3 largest federal employee plans, or the state’s largest commercial health maintenance organization. If states refuse to choose a plan, the benchmark will be the state’s largest small group plan.

Under the proposal, insurers do not have to offer plans that are the same as the benchmark. They can adjust the specific services covered, but the services offered must be in the same 10 categories as the benchmark plan and must be of the same or higher value.

“I think everybody was surprised,” Timothy S. Jost, professor at the Washington and Lee University School of Law in Lexington, Virginia, said in an interview with First Report Managed Care. “I think Congress was probably surprised. They thought [DHHS Secretary Kathleen Sebelius] would put out a list of essential benefits. What [DHHS] did instead was to pass the buck onto the states for the states to decide the essential benefits. There’s just a lot of unanswered questions.”

Some groups criticized DHHS for the vagueness of its guidelines and were stunned that states were given the responsibility to choose the essential health benefits, which could lead to variations in health plans across states.

“It’s not what we were asking for,” Carl Schmid, deputy executive director of the AIDS Institute, told the Wall Street Journal. “I think it’s very clever what they did, but I think that what patient groups were looking for was a list of mandated services. This is still going to allow a patchwork of care, and that’s what I thought we were going to try to get beyond.”

With the 2012 election approaching, some also speculated that the announcement was politically motivated. Republicans have said the ACA will provide the federal government with too much influence on the healthcare industry. By shifting the responsibilities to states, Erik Gordon, a business professor at the University of Michigan, told Bloomberg in an e-mail that “[President Barack] Obama has taken all the grief he can stand over healthcare” and “he doesn’t want to give the Republicans any more political ammunition.”

Still, although the proposal gave states the power, Republican Policy Committee analyst Chris Jacobs told the New York Times that states may choose to impose more benefit mandates, leading to higher premiums. Mr. Jacobs wrote on the Republican Policy Committee Web site that despite states having flexibility, “individuals could be paying for that flexibility for a long time to come.”

Ms. Sebelius explained the department’s decision on essential health benefits in a USA Today op-ed piece published in early January.