4 essential criteria for an essential benefits package

The newly-formed Essential Health Benefits Coalition has four tips for feds as they design an essential benefits package

A new health benefits coalition that represents employers, pharmacy benefit managers and health plans is offering up some criteria it believes will make it easier to administer an essential health benefits package, which is required by health reform.

Affordability is paramount, the coalition says.

The Institute of Medicine released last Thursday a framework for a basic benefits package that is predicted to become the nation's benchmark for health insurance over time, according to the Associated Press. [See Feds to design health care for the masses]

But the Essential Health Benefits Coalition warns that if it's too expansive, the essential health benefits package would force employers to either: Absorb higher health care costs at the expense of creating new jobs and increasing wages; pass more costs onto their workers; or stop offering health coverage altogether.  

For employers who do not currently offer coverage, an expansive essential benefits package would put affordable coverage farther out of reach.

"The high cost of health care and coverage is the biggest barrier today to coverage for individuals and employers alike. While we are still reviewing the entirety of the IOM's recommendations, the question of whether individuals and employers can afford to buy the essential health benefits package must be the crucial consideration," said Neil Trautwein, vice president and employee benefits policy counsel at the National Retail Federation and chairman of the coalition. 

"An expansive, costly essential health benefits package could cause many employers to drop coverage and force more Americans into government-subsidized health care at a significant cost to taxpayers. In today's fragile economy where job creation is a priority, neither employers, workers nor taxpayers can bear the burden of higher health care costs and reduced wages as a consequence."  

There are four essential criteria that the coalition believes HHS' final essential benefits package must satisfy:

  • The essential health benefits package must be affordable.  It should provide basic services that Americans need to protect their health, not coverage for every treatment we might want.
  • The package must be flexible.  It should give individuals and employers the choice to purchase a range of plans and options, and it must allow for flexibility in insurance design and cost-sharing arrangements.
  • The package should make it easier for employers to offer and individuals to obtain coverage. What our economy needs is for businesses to grow and hire more workers – a benefits package that is too expensive will hinder business and job growth.
  • The package must consider all costs associated with its development.  Taxpayer costs will greatly increase if more employers are priced out of offering coverage, further threatening America's fiscal future.

The Patient Protection and Affordable Care Act (ACA) requires that everyone in the United States have health insurance beginning in 2014.

Health plans for individuals and small businesses must include essential health benefits (EHB), which fall under 10 general categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services 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.  

HHS requested that the IOM recommend the criteria and methods for determining and regularly updating the EHB package. The Secretary of Health and Human Services will then issue a specific EHB package that must be offered to individuals.

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