The Department of Health and Human Services released its long-awaited final rule on essential health benefits today, allowing insurers and states to move forward on both the federal and state health exchanges.
The rule defines what must be covered in exchange plans, prohibits discrimination based on age or pre-existing conditions, describes prescription drug benefits and determines levels of coverage.
“The Affordable Care Act helps people get the health insurance they need,” said HHS Secretary Kathleen Sebelius. “People all across the country will soon find it easier to compare and enroll in health plans with better coverage, greater quality and new benefits.”
The states and insurers had been particularly interested in what kind of mental health and substance abuse coverage they would have to include. The new rule provides parity for both, and HHS released a report today that showed that could affect 62 million people.
“Americans accessing coverage through non-grandfathered plans in the individual and small group markets will now be able to count on mental health and substance use disorder coverage that is comparable to their general medical and surgical coverage,” the report states.
But the rule doesn’t include any surprises: A proposed rule released in November looks much the same as today’s version.
“It’s what many of us anticipated,” said Ian Spatz, who advises states and providers about health policy as a senior adviser for the law firm Manatt, Phelps and Phillips. “It’s good news for the states, because they’ve been moving forward based on the proposed rule.”
State insurance commissioners and exchange directors have said they need to work quickly to meet deadlines to create an exchange, but without a final rule, they feared they might have to change direction on the work they have done so far.
“Over the summer, we’ll get to see the what the plans look like and especially how much they will cost,” Spatz said. Insurers have argued that having to provide all of the essential benefits would mean creating plans no one could afford, while patient advocates have argued for more coverage.
In the meantime, HHS has said there are mechanisms built in that would keep costs down for everyone, including subsidies for people whose incomes fall below 400% of the poverty line and preventive care that is expected to keep long-term health care costs down.
Some groups, such as the American Cancer Society Cancer Action Network, praised the section that said insurers may not charge a co-payment if a polyp is removed during a colonoscopy. A colonoscopy itself is preventive care; some insurers determined that if a polyp were removed during the procedure, it could be reclassified as “diagnostic,” and the patient could be liable for part or all of the cost–often as much as $1,000. That’s good news for patients who have a preventive exam and wake up to learn they had a procedure they must pay for, said Stephen Finan, senior director of policy for the American Cancer Society’s Cancer Action Network.
“We specifically went to HHS with this issue a few months ago,” Finan said.
Not everyone was pleased. National Retail Federation employee benefits policy counsel Neil Trautwein said that, though the administration has been “pretty reasonable and consistent with what they said they would be,” his coalition of retailers is particularly sensitive to price and product. In his view, highlighting mental health parity after the shooting in Newtown, Conn., and applying it to small group and individual plans could prove to be a costly mistake.
“It’s really an imperfect way to take on society’s problems,” he said. “We had argued against it. It’s a cost question and a suitability issue.”
The Mental Health Parity law came about because insurers and employers had implemented yearly and lifetime coverage caps for mental health care, as well as requiring employees to pay copays for treatment when that wasn’t required for other chronic care issues, such as asthma or diabetes.
HHS has argued that addressing mental health issues in a stable way could cut health care costs in the long-term because people are less likely to end up hospitalized, are more likely to finish college or get good jobs, and are more apt to participate in their communities.
“Time will tell,” Trautwein said. “We’ll have a better idea in the fall.”
The essential health benefits include ambulatory patient services; emergency care; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and rehabilitative services and devices; laboratory services; preventive and wellness services, and chronic disease management; and pediatric services, including dental and vision care.
Plans in the individual and small-group markets inside and outside of health care exchanges must cover essential health benefits beginning in 2014.
Health care exchanges, or marketplaces, allow consumers to go to a website and compare benefits and costs of different plans. HHS’s essential rules are meant to make the categories comparable, though states may require more from the insurers that participate in the exchanges.
The rule also assigns “metal” ratings to different levels of plans, so a consumer will know that a bronze plan will have less generous benefits, but will cost less than a platinum plan.
Much of what will be included is similar to what is commonly covered by plans now, but there will be some changes in the small-group market, including coverage of mental health issues and substance abuse disorders, habilitative care, pediatric dental care and pediatric vision care.
But HHS also predicted in the rule that many individual market plans will not cover all 10 essential health benefits, which should help keep costs down.
The rule also states an insurer may not discriminate based on an “individual’s age, expected length of life, present or predicted disability, degree of medical dependency, quality of life or other health conditions.”
HHS received about 11,000 comments before posting the final rule, including health insurance issuers, consumers, health providers, states, employers, employees and Congress members. Concerns included everything from coverage of lactation services and acupuncture to maternity coverage for dependents and cost-sharing for mental health care.
Source: USA Today