NHeLP Comments to Essential Health Benefits FAQs

1. Under the approach described in the Bulletin, would the Secretary permit the State to adopt different benchmark plans for its individual and small group markets?
 
In our comments to the Department of Health and Human Services? (HHS) Essential Health Benefits (EHB) Bulletin (attached) we outlined why we consider a state-based benchmarking approach as contrary to the legal authority of the ACA, a harmful policy for consumers, and very difficult for HHS to regulate. If HHS does proceed with a benchmarking approach, we appreciate the clarification that HHS will not permit multiple EHB standards. We consider it extremely important that HHS maintain this requirement to promote some uniformity at the state level.
 
As we stated in our response to the EHB Bulletin, we strongly oppose allowing issuers to substitute benefits, and we are disappointed to see this problematic policy reiterated in the FAQ. The ACA did not authorize HHS to delegate this role to states or insurers. Such a policy will lead to insurers abusing their authority to design benefits packages that disfavor vulnerable and underserved populations and will act as a proxy for medical underwriting, which is explicitly prohibited by the ACA. This flexibility conflicts with the objectives of the ACA, including the effort to develop uniform benefits that consumers will understand.
 
2. When a State chooses an EHB benchmark plan, would the benefits be frozen in time, or as the benchmark plan updates benefits each year, would the benchmark plan reflect these updates?
 
We support HHS? decision to maintain constant benefits in the first two plan years, although we urge HHS to reserve the right to add additional benefit requirements if the EHB standard proves insufficient or insurers abuse it and limit access to important health care coverage.
 
We previously explained the importance of developing an effective process for reviewing and updating EHB benefits. For example, benefits packages should be regularly reviewed through a transparent and publicly-reported process, modeled after the new § 1115 public process regulation, which includes meaningful consumer participation. Such a process will help ensure that the EHB defined benefits do not adversely affect certain populations or specific diseases or conditions. We believe the FAQ or future regulations or guidance should clarify that states must conduct such a review when updating or renewing any plan.
 
3. Would States be required to defray the cost of any State-mandated benefit?
 
The FAQ reiterates the EHB Bulletin policy that states must defray the cost of state mandates not included in the EHB benchmark. We previously recommended that HHS reject this approach because it may result in exclusion of critical state mandated benefits (which often protect underserved populations) and encourage states to select small group plans as their benchmarks (which will lead to inferior benefits packages).
 
We urge HHS to adopt a policy to protect important state mandates and promote selection of benchmarks offering broader coverage (not small group plan coverage). The two-year grace period, while potentially helpful to states in the short-term, only delays the inevitable conflict and does not change the fact that fiscally challenged states will have little choice but to drop mandates in two years. Mandates play a critical role in helping states address gender, racial, and disease-based disparities. An EHB standard which ignores state efforts to improve insurance coverage will undermine those efforts and put states and insurers in an untenable financial situation.
 
The FAQ also reiterates HHS? intent to use the largest small group plan as the default EHB benchmark plan when a state does not select a benchmark. We believe that setting the default as a small group plan risks providing consumers with an inferior benefits package. We recommend that the default be any one of the first three Medicaid benchmark options listed in § 1937 (i.e., FEHBP-equivalent, State employee, and largest HMO coverage). This policy would reduce harm to consumers resulting from inferior small group coverage and could create important uniformity of benefits between the Medicaid expansion and Exchange populations (and potentially Basic Health Plan populations). Our recommendation does not include Secretary-approved coverage because the insurance market should not depend on politics and what any given Presidentially-appointed Secretary is willing to approve. Insurers, Exchanges, and insured individuals need clear and dependable options.
 
4. Could a State add State-mandated benefits to the State-selected EHB benchmark plan today without having to defray the costs of those mandated benefits?
 
We recognize that HHS may need to set some outer limit on the ability of states to freely add to the EHB with limitless state mandates. However, we recommend that any such policy contain an exception process whereby the state mandate can be added to the EHB if the state can demonstrate that the mandate already exists in a plurality of states, is supported by evidence- based practice or the recommendations of a relevant academic or medical association, or is in keeping with medical standards of care.
 
5. How must a State supplement a benchmark plan if it is missing coverage in one or more of the ten statutory categories?
 
We previously explained why the policy of filling-in benchmark gaps by reliance on other benchmark plans is likely to result in inadequate coverage for consumers, and is counter to the ACA requirement to provide coverage in the 10 statutory categories. The FAQ, however, reiterates this policy, which we urge HHS to reconsider. First, the policy does not recognize a clear distinction between offering no coverage and offering insufficient coverage; HHS does not specify that states would have to fill-in for insufficient coverage. Second, reliance on another benchmark, which may itself be insufficient or subject to the same historical disparities in health coverage, is a poor method to fill-in benchmark coverage gaps. This offers a flawed solution if the primary benchmark offers no coverage, and HHS? answer offers no solution if the primary or supplementary benchmark offers poor coverage.
 
In HHS? answer, it used the term ?default? (in the 3rd sentence of paragraph 1).  We believe HHS intended this as a term of art referring only to a situation where a state had not selected a benchmark and thus the largest small group plan applies. This sentence may be confusing to some readers who do not recognize this term of art and interpret ?default? to mean the benchmark selected by the state. We recommend HHS clarifies the term.
 
The EHB Bulletin and FAQ state the benchmarking policy for habilitative and pediatric oral and vision services. As we previously recommended, services for children should utilize Medicaid?s Early Periodic Screening Diagnosis and Treatment (EPSDT) standards, and habilitative services should meet the needs of the diverse populations who will rely on the coverage (and should not be at the discretion of insurers or tied to rehabilitative services, which serve an entirely different purpose).
 
NHeLP also recommends that HHS should make clear that any benchmark tied to a FEHBP must allow abortion coverage in accordance with ACA § 1303. Federal funding restrictions such as  the Hyde Amendment should not apply to or otherwise limit EHB benchmark standards used for private coverage.
 
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