Colorado’s recent expansion of health coverage to require gender-affirming care provides a prime example of how states can use the benchmarking process for Essential Health Benefits (EHB) to address unmet health needs. Under the Colorado improvements recently approved by the Biden-Harris administration, most health plans regulated by the State must provide, in addition to gender-affirming care, expanded prescription drug coverage, mental health wellness exams, and acupuncture treatments.
Colorado used the regulatory framework under the Affordable Care Act (ACA) to expand and improve health coverage. The ACA established comprehensive coverage requirements for most health plans – the ten essential health benefits – yet federal rules allow states to define EHB using a benchmarking process.
Under the original benchmarking process adopted in 2013, states were to select one of ten health plans available in the state to serve as their EHB benchmark – which then became the baseline for benefits, services, coverage limits, and exclusions for all EHB plans in that state. This benchmarking process has led to wide variation in how EHBs are defined in each state and to significant deficiencies in coverage of key benefits such as maternal health, pediatric services, and mental health and substance use disorder treatment
However, more recent iterations of the federal EHB rules give states additional flexibility in EHB benchmark selection, including the “build your own benchmark” option that Colorado adopted here. (See NHeLP’s Opportunities for States to Expand Marketplace Coverage of Essential Health Benefits). Using these new options, states can significantly expand coverage of essential services, as long as the resulting benchmark complies with a “generosity test.” Under this test, a state’s EHB benchmark can be no more generous than the most generous of the ten plan options originally available in the state.
To demonstrate compliance with the generosity test, Colorado commissioned an actuarial analysis that found that its current EHB benchmark is far less generous, in terms of benefits and services, than the most generous plan available (the federal employee plan). In essence, Colorado realized it was leaving unspent money on the table. That difference between its current benchmark and the most generous benchmark option allowed Colorado to add new benefits and still fall within the limits of the generosity test. (States that already have the most generous option can also add new benefits, but would need to cut some current benefits to meet the generosity test).
Colorado then convened a stakeholder group and used data to identify unmet health care needs and prioritize what benefits to add. Federal rules require states to provide notice and seek public comment on new benchmark selections, but most states have no formal process for benchmark selection.
Colorado is not an anomaly; in fact, most other jurisdictions can add benefits by updating their EHB benchmark plans. Forty-two states, plus the District of Columbia, currently use a small group plan as the state’s EHB benchmark. Small group, commercial plans sold to small businesses and nonprofits are notoriously the least generous of the ten plan options originally available (generally, the most generous plans are the federal or state employee health benefits plans). This means that most states have considerable leeway to add benefits without exceeding the generosity limit just like Colorado did.
For advocates interested in expanding coverage, addressing unmet health needs, and advancing health equity, the first step is identifying who and how the EHB benchmark is selected in your state. (See NHeLP’s Step Guide to Updating Your State’s Essential Health Benefits Benchmark Plan). The deadline for a state to submit its new EHB benchmark selection is May 6, 2022, for plans beginning in 2023. Therefore, the time to start the updating process is now.
NHeLP’s EHB Team can provide technical assistance to advocates interested in updating and expanding benefits through EHB.
Also, register now for NHeLP’s upcoming webinar – Essential Health Benefits Benchmark Plans – Who Decides? – scheduled for November 9 at 2:00 PM (EDT). Attorneys from the National Health Law Program (NHeLP) and the law firm Hooper, Lundy & Bookman will examine state decision-making in EHB benchmark selection, as well as best practices for stakeholder engagement, and how updating EHBs can help address unmet health care needs.
