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If you're a regular Say Ahhh! reader, you've seen a number of posts already on the ongoing process to define the essential health benefits.  Most of those linked to additional supporting documents, like the Bulletin and FAQ released by HHS and the comparison of potential benchmark plans from Maine's insurance department.  And many more EHB documents have arrived in our inboxes so we thought it would be helpful to share them with you. So we've compiled an "essential" list of Essential Health Benefit resources with some quick descriptions of why they're useful for those who are tracking this process.  Here is our Essential Health Benefits Resource List.

We're also working on a more extensive guide to the EHB selection process, so look for another blog post with yet another link in the future!

This week's final exchange rule from HHS is unlikely to be the last large package of rules implementing ACA that we will see in the coming weeks--we still expect regulations on Medicaid eligibility, premium tax credits, and risk adjustment, not to mention more on the essential health benefits and other key topics at some point in the future.  But before those other regs arrive to compete for our attention and yours, we wanted to at least begin to summarize what we've seen in the exchange rule.  I'm taking the first look at the lengthy rules in this post.  Look for future posts from my colleagues to unpack more on the regs--we may not get to them all before the next round hits, but we'll do our best to read them all so you don't have to (you still can if you want!).

The rules announced this week (to be published in the Federal Register on March 27) deal with the process for states to establish their exchanges, the basic functions that exchanges will perform, the guidelines for exchanges in making eligibility determinations, and the certification standards for plans offered through exchanges.  This first post will focus just on the rules for states establishing exchanges.

Overall, the final rule is similar to the proposal from last summer.  In order to have its exchange approved by HHS, a state or exchange must submit and receive approval for an Exchange Blueprint as well as pass a readiness assessment.  Conditional approval is possible if HHS determines a state is likely to be fully operationally ready by October 31, 2013.  While the proposed regs had referred to an Exchange Plan rather than a Blueprint, HHS seems to have changed the terminology to distinguish the exchange document from State Plans under Medicaid and CHIP.  Rather than a formal State Plan Amendment process as occurs in Medicaid and CHIP, exchanges will only need to apply to HHS for approval of "significant changes" to their Exchange Blueprints.  HHS will have 60 days to consider such changes--if it does not deny the change within that period (or extend it with good cause by another 30 days), the state's change will go into effect.

The regulations provide some further guidance on exchange governance.  They specify that an exchange must serve both individuals and small employers, but a state may establish a separate governance and administrative structure for the small business exchange.  This means that states that wish to run only an individual or a small business exchange will not have an approved state exchange--they will have to pursue "partnership" options.

One change from the proposed regulation that moves the rule in a positive direction is a requirement that state exchange governing boards (if the exchange is an independent state agency or a non-profit) must include at least one consumer representative.  Unchanged is the rule that individuals who have a conflict of interest (those affiliated with an insurer, agent, or broker) may serve on the board, but may not make up a majority of the board.

The final rules also require exchange boards to make publicly available certain "governance principles" that include ethical standards, conflict of interest policies, transparency and accountability standards, and a procedure for disclosing relevant financial interests of board members.

These rules provide some helpful guidelines for states that have established or are moving to create their own exchanges.  Many states, though, seem to be preparing for a federally-facilitated exchange, at least for 2014.  This week's regulations don't provide more information on what the federally-facilitated exchange will look like--they only promise future guidance on the topic.  They also mention coming guidance on how states can transition from a federally-facilitated exchange to a state-run exchange.  These transition procedures will be particularly important for states that choose to establish their own exchange, but cannot meet the deadlines to have it up and running in time to provide coverage starting in January 2014.

Some of this week's exchange regulations will be published in interim final status, meaning they remain open to comments from the public.  But none of the exchange establishment provisions mentioned here are in that status--they are final rules.  In the days ahead, we'll look at the remaining provisions of the exchange regulations and highlight where it makes sense for child and family advocates to comment. 

Despite that title, our blog is not converting to the abbreviated language of texts and Twitter--I promise to type out the words in full when they're needed.  We're also definitely not moving with Twitter speed in bringing you the news, but on February 17, the Centers for Medicare and Medicaid Services released a frequently asked questions (FAQ) document on the essential health benefits (EHB).  It clarifies some of the points in the agency's EHB bulletin from December.   The FAQ covers a range of issues that fall into the categories of benchmark options, state mandated benefits, and EHBs in Medicaid.  We wanted to bring you a number of key points in case you're behind in your reading list of sub-regulatory guidance from federal agencies:

Benchmark options

* States may not choose separate benchmark plans for the individual and small group markets--there must be one benchmark for private-market plans.  States may, however, choose a separate benchmark plan for Medicaid benefits that are required to include the EHBs--see below.

* The benchmark plan benefits selected this year will apply in 2014 and 2015, even if the underlying plan's benefits change in the future.  As stated in the original bulletin, CMS will review its overall essential health benefit approach for 2016.

* As suggested in the bulletin, insurers will have the ability to substitute benefits within the 10 required EHB categories as long as the substitutions are actuarially equivalent.  In the FAQ, though, there is no mention of substituting benefits across categories.

* States, on the other hand, may not create a benefit package separate from one of the benchmark choices and have it approved by the Secretary (as in Medicaid or CHIP), even if it is actuarially equivalent to one of the benchmark choices.

* The preventive services required to be covered by the ACA and mental health parity required by other federal law will apply to EHB benefits.

State mandates

* States will be required to defray the cost of any mandated benefits that are not included in the state's essential health benefits.  While most of the benchmark options will include state mandates, there are situations in which a mandate may not be included.  For instance, a certain mandate might apply only in the individual market, not in the small group market.  If a state chose a small group market benchmark and did not otherwise include the mandate in its EHB package, it would need to defray the cost of this individual market mandate.  The FAQ does not provide further info on how these costs would be computed or paid by states.

* State benefit mandates enacted after December 31, 2011 would not be part of the state's EHB package in 2014 and 2015, unless they were already included in the benchmark plan.

EHBs in Medicaid

* For Medicaid, benefits for newly-eligible enrollees must be consistent with existing Medicaid law (Sec. 1937), which allows for three benchmark plan options--the largest non-Medicaid HMO, any state employee health plan, or a certain federal employee plan--as well as Secretary-approved coverage.  States will ALSO choose, through a state plan amendment, an EHB benchmark for Medicaid from any of the ten allowable choices, which while overlapping are not the same as the Sec. 1937 options.

* Once this benchmark choice is made, the state will need to make sure that its Medicaid EHBs, like those for the private market, include all of the ten categories of services required by the ACA.  Medicaid benefits for the newly-eligible will be those benefits that are included in the Sec. 1937 benchmark, supplemented if necessary to include the Medicaid EHBs.  We're still awaiting more in-depth guidance on this interaction of benchmarks in Medicaid, so stay tuned.

We continue to be troubled by the allowance for insurer flexibility in the EHBs, especially when states are not being given flexibility to set a higher benefits standard.  In addition, the FAQ mentions that while the ACA bars annual and lifetime dollar limits on benefits, plans will be able to set limits that aren't based on the amount of dollars expended, like limits on the number of visits or days of treatment.  But in noting that these non-dollar limits should be actuarially equivalent to the dollar limits they're replacing, it seems that enrollees will be no better off.  We hope CMS will further clarify that this won't be a loophole that allows plans to reestablish dollar limits by another name.

The February FAQ gives us a few more answers on the essential health benefits, but a lot of questions remain.  Nonetheless, states will need to move forward quickly to study their benchmark options and make a choice by the third quarter of 2012.  Check back for more updates on this process--we'll share what's happening both from the federal government and the states.      

In a bulletin released late last week, HHS provided some indication of how it will use the key concept of actuarial value in rating health plans under the Affordable Care Act.  The same bulletin shared some clues on the cost-sharing reductions that some moderate income families will receive when they enroll in exchange plans.

Actuarial value is a measure of how generous, on average, a health plan is.  It's expressed as a percentage of the cost of covered services that the plan pays; the remaining costs are covered by plan enrollees through deductibles, co-pays, co-insurance, and other cost-sharing.  It's important to note that actuarial value measures the overall percentage paid by the plan for a standard population--the generosity of the plan for any particular individual depends on that person's use of covered benefits and could well differ from the measured actuarial value.  See this report from Consumers Union for a more in-depth explanation of actuarial value.

Under the Affordable Care Act, all non-grandfathered plans in the individual and small group markets (inside and outside exchanges) must offer an actuarial value at one of four specified levels--60 (bronze), 70 (silver), 80 (gold), or 90 (platinum) percent. 

So what does the new bulletin tell us?  It tells us how plans will be measured to determine whether they fit into one of the specified levels.  It indicates that HHS will use a standard calculator, into which plans can input their cost-sharing amounts, to determine actuarial value.  A plan will enter its deductible, co-pay, and co-insurance amounts and the calculator will return it actuarial value.  This standardized method will ensure that AV is calculated the same way for different plans, enabling valid comparisons between plans.  This will allow families to know that all silver plans, for instance, have the same overall generosity, so they can choose plans based on other aspects, like provider network, quality ratings, and any variation in benefits covered. 

There will be some room for state flexibility, however.  While HHS will develop a nationally-representative standard population to use when measuring actuarial value, states will have the option of developing a their own standard population using state claims data to reflect state demographics.

The bulletin also address the cost-sharing reductions that will be available for individuals who enroll in silver-level exchange plans and have incomes below 400 percent of the federal poverty level.  These reductions are an important element, along with premium tax credits, in making exchange plans affordable for moderate-income enrollees.  The bulletin clarifies that those who qualify for cost-sharing reductions will be able to enroll in plans that have a higher actuarial value and lower cost-sharing, making them more affordable.  The guidance lays out how plans should modify cost-sharing, starting with the out-of-pocket limit, then altering co-pays and deductibles, if necessary.  The bulletin provides some guidelines for making these changes, for instance that lower-income enrollees can't face higher cost-sharing for the same service than higher-income enrollees.

This bulletin provides some further clues on how the Affordable Care Act will help families compare health plans and afford the one they choose to purchase.  But it's not the only guidance we've seen recently from HHS.  Stay tuned for a coming post on another recent bulletin on another of those ACA topics we've been tracking closely--the essential health benefits.

HHS's essential health benefits bulletin is less than two months old--in fact, the comment period just closed this week, click here for our comment letter--but some states are already planning for what it could mean for their residents.

The Bulletin indicates that states will be able to choose the core of their essential health benefits package by copying the benefits from one of ten existing health plans.  That immediately raises the question--what do those ten plans cover? And which one would be best for kids, families, and all health insurance consumers?

Answering these questions will be complex, but a great way to start is to look at the ten plan choices side-by-side to compare what they cover.  In Maine, the Department of Insurance has put together a helpful table that compares coverage across plans in some key benefit categories.  It's by no means a complete analysis, but it's a great way to begin this important comparison.

Have you seen a similar document in your state?  If not, it could be something to ask your state's insurance regulator to put together.  Of course, you'll still want to make sure that the full plan documents that provide detailed coverage information are released publicly for each of the potential benchmarks before your state's selection is made.  But getting the plan comparison underway with a summary table like Maine's can be a good way to get started--the Bulletin says states should choose their benchmark plans by the third quarter of this year.      

Editor's Note: This is the fourth blog in a series on essential health benefits.

It's a busy month on the essential health benefits front!  As we've noted, one option for states under the proposed approach for state-defined EHB packages is to use one of the state's three largest small group plans as a benchmark.  It's been difficult to evaluate this proposal because we didn't know which plans were the three largest in each state--even state insurance commissions don't always have this information.

Well, on Wednesday, HHS released a list of what it believes to be the three largest small group plans for every state.  It relies on data insurers submitted to Healthcare.gov from June of 2011.  The list comes with many disclaimers, so we can't take it as the official small group choices for states, but it's a start.

This info is useful to have, but we still need to know more about these plans to fully evaluate the EHB proposal.  We need to know exactly what the plans cover and what they exclude.  The list of plan names from HHS at least gives us a place to start in digging up that information. 

We have been offering our insights on essential health benefits through a series of blog posts.

This post is to alert you that Georgetown CCF has drafted a letter in response to the Bulletin issued by HHS in December.  We raise a number of concerns with the Bulletin's approach to essential health benefits and ask that HHS made a number of changes to better protect benefits for children and their families.  The letter asks HHS to:

* Ensure children's needs are taken into account--The benchmark plans identified in the bulletin are predominately employer-based plans.  We think states should have an option to choose a benefit package that has been designed with children's developmental needs in mind, like Medicaid's EPSDT benefit.

* Define pediatric services as including but not limited to oral and vision care--While the Bulletin discusses only oral and vision care for kids, we believe there are other services, like speech therapy or more frequent durable medical equipment, that Congress intended children to receive under this category of services it included as a requirement for the EHBs.

* Define medical necessity--Since a determination of medical necessity will affect whether a child can access the essential health benefits, we believe it is crucial for the Secretary to set a standard definition of this concept that insurance plans must follow.

* Limit insurer flexibility--The Bulletin suggests that insurers would have the authority to alter the essential health benefits.  We believe this will take away a key feature of exchange--apples-to-apples comparisons between plans.

* Assure a transparent process of benchmark selection and updating--Ensuring meaningful opportunities for public participation will be key to protecting the interests of children, families, and all insurance consumers. 

We plan to submit the letter by the date for responses provided in the Bulletin:  Tuesday, January 31.  We encourage other organizations to provide comments, as well, and if you would like to use our letter for inspiration or outright copying, please do so!  Remember, too, that since HHS explained its approach in a Bulletin rather than a formal proposed rule, it can still consider comments that come in after the January 31 date.  But don't wait too long as there will be no shortage of health reform guidance and rulemaking filling all of our inboxes in the months ahead.

For nearly a year now, we've been tracking the process of defining the essential health benefits.  The EHB package will define the minimum set of benefits to be covered by insurance plans in the individual and small group markets as well as benchmark Medicaid plans and Basic Health Programs.

On Friday afternoon, HHS released a bulletin to give some indication of its approach to defining the essential health benefits and to request continued comment.  The bulletin indicates that rather than one national standard, each state will have a choice of how to define which health benefits are deemed essential for its residents.  Under this approach, states would tie their EHB package to the benefit package offered under one of several benchmark options:

• One of the three largest small group products in the state
• One of the three largest state employee health plans
• One of the three largest federal employee health plans
• The largest HMO plan in the state

Once the benchmark is selected, the package still must comply with the ACA's requirement that the EHBs cover ten required categories of services.  So if the selected benchmark does not cover all ten categories, those services must be added to the package.  The state's EHB package must also comply with additional ACA requirements that prevent discrimination based on age and disability and mandate consideration for the needs of certain populations, among them children.

What does this mean for the benefits kids will receive under the ACA?  Unlike what many had expected, it means there is less likely to be a strong federal minimum benefit standard--instead benefits will be tied to the existing insurance offerings in many states, which can certainly leave a lot to be desired in many cases.  A key point yet to be determined is how services under the ten categories will be added to benchmark packages that lack them.  "Pediatric services, including oral and vision care," is one of the ten categories that must be covered, but the bulletin seems to indicate that HHS will interpret this category to mean only oral and vision care for kids, not other needed pediatric services.  Further, habilitation services is another of the categories and is important for many children, but is usually excluded from the types of plans identified as potential benchmarks.  The bulletin suggests some possible ways to add these services, but the details are sketchy.  It's also unclear how the ACA's provisions preventing discrimination and requiring consideration of children's needs will be applied--these could become key protections if they are the only standard for assuring kids get what they need.

Where do we go from here?  The process for defining EHBs is still very much underway.  HHS put out the bulletin to let us know the direction it is moving, but it still has yet to formally propose regulations that define EHBs.  It has requested further comments on the ideas in the bulletin to further inform the rulemaking process, which will later include its own comment period.  But if the scheme in the bulletin remains in place, publishing federal regulations will not be the last step in defining EHBs.  Each state will have to choose which benchmark to adopt and how to augment it, so advocates for kids will need to weigh in to make sure those choices are good ones for children.

We've posted in the past about the essential health benefits--the package of benefits that will be the basis for all health plans in the individual and small group markets and for some in Medicaid starting in 2014. Last month, the Institute of Medicine made recommendations to the Department of Health and Human Services on how to choose the essential health benefits, but HHS wants to hear other perspectives, too. The Department is holding ten "listening sessions" across the country to allow anyone to provide input on EHBs. The first session will be this Friday, November 4 in Chicago and the last on November 21 in San Francisco. See the full list here.

What message should advocates for kids and families carry to these meetings? The 100% Campaign in California has provided a strong example in a letter they've already provided to HHS, which was also signed by two dozen other organizations in the state. Their key points (with my additions in parentheses):

• Children have unique health needs (and are often not well served by the typical small employer health plan, the model the IOM identified for the essential health benefits).

• Instead, Medicaid's EPSDT benefit standard should be the model for kids' benefits in the EHB.

• The definition of "medical necessity" is important to assuring kids get all the services they need (especially for kids' developmental and habilitative needs) and again in this area EPSDT provides a stronger model than private plans.

• The essential health benefits represent an opportunity to address health disparities by providing benefits that not only treat disease, but promote and maintain health for those who will be newly eligible for exchange subsidies and Medicaid.

Child advocates will want to emphasize that kids should have access to the services that are medically necessary and that affordability from a family's perspective needs to take into account not just premium costs, but cost-sharing and any costs for services that are necessary but not covered. Those planning to attend may also want to address the questions that HHS has posed for attendees:
 

• In keeping with the title of the Institute of Medicine report "Essential Health Benefits--Balancing Coverage and Cost", how can the Department best meet the dual goals of balancing the comprehensiveness of coverage included in essential health benefits and affordability?

• How might the Department ensure that essential health benefits reflect an appropriate balance among the categories so that they are not unduly weighted toward any category?

• What policy principles and criteria should be taken into account to prevent discrimination against individuals because of their age, disability status, or expected length of life as the Affordable Care Act requires?

• What models should HHS consider in developing essential health benefits?

• What criteria should be used to update essential health benefits over time and what should the process be for their modification?

Once the listening sessions are complete, HHS will write a proposed rule that provides more definition of the essential health benefits. We'll all have a chance to weigh in then in writing before the rule becomes final, but this month is your chance to speak in person to HHS officials on the importance of providing strong benefits for kids. Other stakeholders will surely be making their case, so kids and families need strong representation, too.