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Health plans must offer essential benefits at parity

February 22, 2013
by Alison Knopf, Contributing Writer
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After receiving more than 3,000 comments on its proposed rule involving the Essential Health Benefits spelled out in the Affordable Care Act, the Department of Health and Human Services (HHS) today unveiled its final rule outlining standards for Essential Health benefits. The rule requires all new small group and individual market plans to cover ten Essential Health Benefit categories, including mental health and substance use disorder services, "at parity" with medical and surgical benefits. 

The proposed rule, which was filed by HHS in late November, included “benchmark” plans for each state which were supposed to serve as a guide for states to create their own Essential Health Benefits (EHB) packages. These packages of coverage would combine benefits in ten categories specified by the ACA that would be required in all health insurance plans offered in the states, including:

•         Ambulatory patient services

•         Emergency services

•         Hospitalization

•         Maternity and newborn care

•         Behavioral health—Mental health and substance use disorder treatment services

•         Prescription drugs

•         Rehabilitative and habilitative services and devices

•         Laboratory services

•         Preventive and wellness services

•         Chronic disease management   

Push and pull over states' role in EHB definition

Throughout the comment process, behavioral healthcare advocates’ comments about the state-based benchmarking approach indicated concern about a lack of parity in benefits and a lack of enforcement of the interim final parity rules, but the final rule did ease those concerns somewhat.

“We got a big win in that if a state decides to supplement their behavioral health benefit, they don’t have to pay for it,” said Carol McDaid, principal with Capitol Decisions. “It will be a cost associated with the essential health benefits,” she told Addiction ProfessionalWhat was lost, however, was the last hope that HHS would tell states how they would have to supplement deficient plans. “They leave it up to the states, which screws us,” said one insider.

Meanwhile, employers and insurance companies held a different view in their comments about the proposed role, stressing the issue of "affordability" and asking that the final rule would provide them more flexibility. They got it. Affordability arguments stressed the idea that health insurance premiums would be unaffordable if plans had to include everything that was in the HHS-mandated package. Requests for flexibility asked regulators to allow employers and individuals to choose from a range of plans. They even argued that bare-bones benefit plans, perhaps not including comprehensive behavioral health care at all, should be offered, too. But regulators wouldn't go that far. 

The threat in employers' comments was clear: they will not purchase health insurance for employees if they consider the premiums to be too expensive. The implication: they would rather pay penalties for refusing to offer insurance. 

Parity compliance requirement a plus

There are some pluses in the final rule, as McDaid noted. From an HHS policy brief issued after the final rule came out: “While almost all large group plans and most small group plans include coverage for some mental health and substance use disorder services, there are gaps in coverage and many people with some coverage of these services do not currently receive the benefit of federal parity protections. The final rule implementing the Essential Health Benefits directs non-grandfathered health plans in the individual and small group markets to cover mental health and substance use disorder services as well as to comply with the federal parity law requirements beginning in 2014,” she said.

But, there's also a big concern: Many of the "benchmark" plans used by states as the basis of all or parts of their EHBs are deficient in terms of behavioral health benefits. The behavioral health care field, represented by the Coalition for Whole Health, co-chaired by Paul Samuels, president and director of the Legal Action Center, and Ron Manderscheid, Ph.D., executive director of the National Association of County Behavioral Health and Developmental Disability Directors, remains concerned that behavioral health care will not be fully covered under the exchanges, since there's no HHS mechanism to tell states how to remedy the deficiencies in the EHB package that each state has defined.

The concern about variability in the EHB packages offered by states emerged when HHS decided to allow the states to define their own insurance exchanges more than a year ago, and more recently when HHS said that states could define their own state-specific EHB packages based on the benefits offered in a variety of insurance plans offered by the federal government or within the state. What the field had expected was far different – that HHS would have a hands-on approach, requiring states to offer a federally-defined package of benefits on the exchanges. “This was much more flexibility than any of us had assumed,” one veteran parity lobbyist told AP. And that flexibility remains intact. There may not be any way to address this problem, the lobbyist said.