Time to Start Thinking About Benefit Design?

Has your state begun thinking about the health insurance benefit packages that will be offered through exchanges? Have you assessed the current benefit mandates in your state? Has your state discussed which benefits will be covered in exchanges or what limits to place on benefits?  If you feel stymied by these tough questions, you are likely not alone. However, panelists at NASHP’s annual conference cautioned states that it’s time to begin considering decisions on these issues.
One of the panelists, Rhode Island Health Insurance Commissioner Christopher Koller, reminded the audience of the high stakes of these decisions. While states may choose to provide benefits beyond what is required in the essential health benefits (EHB) package, they will be responsible for the full cost of those benefits for individuals receiving subsidies through the exchange. Since many states already require insurers to cover some specific services, each state will need to figure out how to react to the potential financial impact of the EHB requirements. One early step in understanding this impact is to catalog all existing mandates in each state.
Carolyn Ingram of the Center for Health Care Strategies, another speaker on the panel, also recommended that states assess their existing public and private health insurance programs and benefit sets now, so that they can quickly reach decisions about benefit package design when guidance is released. Six factors she recommends considering in assessing existing benefit sets are: financial eligibility, non-financial eligibility, covered benefits, federal/state share and funding authority, delivery system, and cost-sharing requirements. Since many individuals and families will move in and out of coverage in the exchange, Ingram says that states should also consider how qualified health plans and the state’s Medicaid expansion benefit package meet any insurance benefit requirements under existing state law.
As John Lewis of the California Health Benefits Review Program noted during the conference session, states will need to review the effects of each existing state benefit mandate to evaluate the financial impact of the EHB requirements. In determining whether to keep, add, or remove benefit mandates, Lewis recommends states evaluate evidence of medical effectiveness and impacts on morbidity, mortality, and disparities. In addition, he also recommends that states evaluate the impact of existing benefit mandates on benefit coverage, utilization, premiums, enrollee expenses, and state budgets.
Jeanene Smith, from the Office of Oregon Health Policy and Research, noted that Oregon has begun to the process of reviewing its state benefit design. Oregon uses a prioritized list of value-based benefits to design its benefit package for Medicaid. The state’s prioritized list is currently based on a number of factors, including: impact on health life years, impact on suffering, population effects, and net cost. A preliminary review of the state’s value-based benefit design efforts showed that the state’s cost-sharing approach could be adjusted to fit within the requirements under the ACA.
In early October, the Institute of Medicine (IOM) published its recommendations to HHS on the EHB requirement for plans participating in the health insurance exchanges. HHS charged the IOM with recommending a process for developing and defining the essential health benefits, rather than recommending a specific set of benefits. Although the IOM recommendations provide a general framework for developing the EHB requirements, many states are awaiting the final requirements from HHS in order to assess the implications for existing state benefit mandates on insurers. We don’t expect to see guidance from HHS on EHBs until sometime during the middle of next year, but states can take additional steps to catalogue existing benefit requirements, so they are prepared to act when guidance is released.
A State Refor(u)m user recently asked a question about how states are planning to assess which mandated benefits will continue after the EHB requirements are issued. We encourage states to share what they are doing here.