WASHINGTON--(BUSINESS WIRE)--The Essential Health Benefits Coalition (EHBC) announced today its recommendations for the Department of Health and Human Services (HHS) to consider as it works to develop the essential health benefits package in the new health reform law.
The EHBC appreciates that HHS recognized the crucial need for state flexibility in its transitional strategy to implement the essential health benefits (EHB) package. Providing flexibility in selecting a benchmark plan will help assure that states can tailor benefits to meet their residents’ health needs. Of equal importance is the need to ensure availability of high-quality, affordable coverage options. Simply stated, making certain that EHB packages do not put the cost of coverage beyond the reach of small businesses, their employees and individuals must be a central objective.
“HHS has an opportunity to develop an essential health benefits package that is both affordable and flexible to ensure that workers can get the health coverage they need,” said Stacey Rampy, executive director of the coalition. “We look forward to working with Secretary Sebelius and hope these recommendations are helpful in reaching that crucial goal.”
As HHS continues its work in developing EHB policies, the Coalition offers the following for consideration:
- Adopt Institute of Medicine (IOM) Premium Target Recommendation. In its report to HHS, the IOM recommended setting a premium target that reflects the current average cost of a small business health insurance plan as the benchmark for determining the inclusion of specific benefits in the EHB package. The Coalition strongly agrees with the IOM that currently available small group coverage should guide the EHB package.
- Avoid including benefits not typically offered under small group plans. Benefits included in the benchmark should include only those typically offered under small group plans. To help ensure coverage affordability, expanding these benefits beyond the minimum necessary to comply with the law should be avoided.
- Allow Private Sector Strategies to Achieve Greater Benefit Value and Affordability; avoid applying Medicare requirements. Private sector benefit design, medical management and care delivery approaches have helped achieve greater benefit value and affordability. The Coalition strongly urges HHS to ensure that health plans can continue to use these strategies employed in the commercial market and not to apply Medicare requirements, which would limit plans’ ability to craft and implement innovative strategies to improve quality, outcomes and value.
- Apply cost and medical effectiveness considerations to all benefits, including state mandates. Development of the EHB package should incorporate evaluations of benefits, including state benefit mandates, from both a cost and medical effectiveness perspective. The Coalition recommends that in order to ensure affordability, HHS encourage states to undertake a review of their most costly benefit mandates, using the method described by the IOM in its recommendations to HHS on defining EHBs, and exclude state-mandated benefits that lack a strong evidence-base after the transition period (2014-2015).
- Ensure affordability by allowing health plans to make a “good faith” determination of whether or not a benefit included in the benchmark is essential for purposes of applying annual limits. The February “Frequently Asked Questions (FAQ)” document indicates that HHS will prohibit annual dollar limits on any benefit, including state-mandated benefits, in the benchmark, although the FAQ indicates that health plans would be permitted to impose non-dollar limits that are at least actuarially equivalent to the annual dollar limits. To ensure that coverage remains affordable, the Coalition urges HHS to permit health plans to make a good faith determination of whether the benefits offered in the state benchmark, including state-mandated benefits, are essential (i.e., fall within the 10 statutorily-required essential health benefit categories). If a health plan determines in good faith that a benefit is not essential (does not fall into one of the 10 categories), the health plan may apply annual dollar limits on that benefit. If a health plan determines that a benefit is essential, the health plan may not apply annual dollar limits on that benefit.
- Permit flexibility in determining actuarially equivalent benefits. The Essential Health Benefits Bulletin provides that health plans will be required to offer benefits that are “substantially equal” to the benefits in the benchmark plan. To ensure that coverage remains affordable, the Coalition urges HHS to adopt rules that allow the maximum amount of flexibility in determining reasonable substitutions that have an actuarially equivalent value to the benefits in the benchmark plan.
The broad-based coalition – composed of groups representing employers, pharmacy benefit managers and health plans across America – has previously cautioned that an expansive essential health benefits package would force employers to: 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 further out of reach.
“The high cost of health care and coverage is the biggest barrier today to coverage for individuals and employers alike. The question of whether individuals and employers can afford to buy the essential health benefits package must be the crucial consideration. 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,” said Neil Trautwein, vice president and employee benefits policy counsel at the National Retail Federation and chairman of the coalition. “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.”
The Coalition has long maintained that there are four essential criteria that 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 expansive coverage that is unaffordable for individuals or small employers.
- 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. Our economy needs 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.
About the Essential Health Benefits Coalition (EHBC)
The EHBC is a broad-based organization composed of trade associations representing large and small employers from various sectors of the U.S. economy, pharmacy benefit managers, and health plans operating in nearly every state. The growing membership of the coalition includes the National Retail Federation, U.S. Chamber of Commerce, National Federation of Independent Business, National Association of Manufacturers, National Association of Wholesaler-Distributors, National Association of Health Underwriters, Blue Cross and Blue Shield Association, Retail Industry Leaders Association, Prime Therapeutics, America’s Health Insurance Plans, Express Scripts Inc., American Osteopathic Association, National Association of Dental Plans, Delta Dental Plans, Council for Affordable Health Insurance, Communicating for Agriculture, The IHC Group and Pharmaceutical Care Management Association. To learn more please visit http://ehbcoalition.org/