As we have discussed in previous posts, beginning in 2014, under the Affordable Care Act (ACA), Medicaid plans and small group and individual plans sold inside and outside of the Health Insurance Marketplace must cover a package of 10 categories of items and services known as Essential Health Benefits (EHBs).  These categories include:

  1. Ambulatory patient services
  2. Emergency services
  3. Hospitalization
  4. Maternity and newborn care
  5. Mental and/or substance use disorder services, including treatment of behavioral disorders
  6. Prescription drugs
  7. Rehabilitative and habilitative services and devices
  8. Laboratory services
  9. Preventive and wellness services and chronic disease management
  10. Pediatric services, including oral and vision care

Insurance policies must cover these benefits in order to be certified and offered in the Marketplace, and all Medicaid state plans must cover these services by 2014.

Instead of the federal government mandating the actual services that must be provided under the EHB requirement, EHBs will be defined by a benchmark plan selected by each state.  States will have the ability to select a benchmark plan that reflects the scope of services offered by a “typical employer plan” in their area.  This gives states the flexibility to select a plan that best meets the needs of its citizens.  The benefits and services included in the benchmark plan selected by the state will be the EHB package.  Plans can modify coverage within a benefit category, as long as they do not reduce the value of coverage.  If a state did not select a benchmark plan by October 2012, HHS selected as a default benchmark the small group plan with the largest enrollment in the state.

The Centers for Medicare & Medicaid Services’ (CMS) Center for Consumer Information & Insurance Oversight (CCIIO) website includes two documents for each EHB-benchmark plan in the 50 states, D.C. and Puerto Rico – a summary of the plan’s specific benefits and limits and list of covered prescription drug categories and classes, and a description of state-required benefits.  See http://www.cms.gov/cciio/resources/data-resources/ehb.html to learn more about your state’s EHB-benchmark plan, including the kinds of benefits covered and benefit limits.

The goal of requiring Medicaid plans and small group and individual plans sold inside and outside of the Marketplace to cover items and services in these 10 categories is to afford an element of standardization or predictability in the kinds of benefits offered to individuals.  Although most plans do already cover services such as inpatient hospital and primary care services, for example, coverage is not generally mandated.  Other services, such as behavioral health services, however, are covered much less frequently.  According to an April 2012 Health Affairs  article that cited statistics provided by the United States Department of Health and Human Services, approximately 62% of plans in the individual market do not provide maternity coverage, 18% do not cover mental health services, and 9% do not cover prescription drugs.  The EHB requirement seeks to remedy this imbalance.

Although certain plans will be required to cover these 10 categories of services, it is still incumbent upon each individual to understand just what each plan he or she is considering actually covers.  For example, one plan may have more or less generous benefits or service utilization limitations than another plan.  This is particularly important for individuals who require certain specialized health care services.

Medicaid and EHBs

Although individuals both traditionally and newly eligible (under a state’s Medicaid expansion, if it chooses to implement one) for Medicaid will have access to items and services covered as part of the EHB package, the benefit package offered as part of a state’s Medicaid expansion does not have to mirror its traditional Medicaid benefit package.  Rather, a state can choose to use a Medicaid “alternative benefit plan” for its expansion population.  If it does, the Medicaid expansion population may get a benefit package that is less robust than the state’s traditional Medicaid benefit package.

Habilitative Services and EHBs

Most of the categories of services described above are commonly known in the health insurance world.  Defining the types of services that must be covered under the definition of habilitative services, however, has proven more complicated, as there is no generally accepted definition of habilitative services among health plans.  Moreover, private health plans have not typically covered habilitation prior to the ACA.  Under the ACA, states have the option to define habilitative benefits in state EHBs, require parity between habilitative and rehabilitative services, or allow issuers to decide coverage and report to the U. S. Department of Health and Human Services.  As we discussed in a post earlier this year, Arkansas, for example, has chosen to define habilitative services in its EHB package.