The Trump administration issued the Notice of Benefits and Payment Parameters Final Rule for 2019 (HHS 2019 Final Rule), which introduced several changes to the way states define individual and small-group market coverage of the ten Essential Health Benefits (EHBs) mandated by the Affordable Care Act. The HHS 2019 Final Rule maintained the benchmarking process introduced by the previous administration but removed the 10 benchmark plan options states had in 2017 and introduced three new options that states may now use to weaken coverage of EHBs.
Although administration claims that the HHS 2019 Final Rule gives states more flexibility, the rule in fact hamstrings states abilities to define EHBs as they see fit. The rule allows states to require less comprehensive coverage of EHBs, but explicitly prohibits them from expanding the definition of these essential health care services by using the most generous of the 2017 benchmark plan options as a ceiling. States that already use the most generous 2017 benchmark plan may only expand the number of health services covered under a given benefit category at the expense of other categories, the benefits of which may need to be reduced to maintain the overall actuarial value of the benchmark plan.
Despite these limitations, there are several actions states can and should take to ensure accountability and appropriate coverage of EHBs. For example, states should not allow the governor and administrative agency to select a benchmark plan for compliance with the EHB mandate without requiring a legislative approval process. The majority of states do not require such a process. Moreover, there should be public accountability and stakeholder input. Although the federal rule requires states to provide opportunity for public comment, few states have a process in place to ensure such public accountability.
California serves as an example of what states can and should do to protect people seeking health care in the individual and small-group market. To ensure a rigorous benchmarking process, California’s EHB benchmark plan was codified in state law in 2015. Any changes to the benchmark plan must be passed by the legislature with approval from the governor. This process guarantees that the benchmark plan selected by the state reflects the will of a majority of its elected officials and protects individuals from arbitrary cuts proposed by future state administrations. By enacting coverage of EHBs into state law, as California did, states would be able to ensures that EHB coverage remains as comprehensive as possible under the new rule.
States may also seek to enact into state law several federal requirements that, while not eliminated by the HHS 2019 Final Rule, may be subject to attack in the future. Here again, California is an example, as it incorporated the current federal definition of habilitative services (which HHS adopted to minimize variability in how the benefit is covered and in the lack of coverage of habilitative versus rehabilitative services) into state law. Moreover, while California does not currently incorporate the federal prescription drug standard into its state law, enacting this requirement in state law would ensure that coverage is not disrupted if the standard is weakened by Trump or another conservative president in the future.
Aside from permitting states to weaken EHB coverage, the new Trump rule allows plans to circumvent the EHB requirements by permitting substitution of benefits within and between categories. This means that a private plan may seek to provide enhanced hospitalization services in lieu of mental health and substance use disorder services as long as the overall actuarial value of the benchmark plan is maintained. States, however, can and should prohibit substitution within and/or between categories. California did this through the state’s EHB statute, which explicitly prohibits “substitutions for the benefits required to be covered […], regardless of whether those substitutions are actuarially equivalent.” By prohibiting benefit substitution, California law prevents plans from offering minimal coverage for some EHB categories, and states seeking to protect individuals and families seeking health care from the federal administration’s harmful policies should follow suit.
In its effort to sabotage the ACA, the Trump administration has given states the ability to undermine the EHB standard, which is vital to ensuring quality health care plans. However, the ACA is still the law of the land and individual and small-group market plans must continue to abide by the EHB mandate. States, thus, have the power to ensure appropriate coverage of all ten EHBs, even under the HHS 2019 Final Rule. Enacting protections that are or were part of the federal regulations and codifying into state law benchmark plans that provide comprehensive coverage of EHBs, such as California has done, will render Trump’s sabotage less effective and will provide continuous protection to the millions of people accessing health care through individual and small-group market plans.