The bare essen­tials

Re­lease of IOM re­port leaves HHS to de­ter­mine what should be cov­ered by health ben­e­fits pack­ages

Modern Healthcare - - COVER STORY -

For all its com­plex­i­ties, the In­sti­tute of Medicine’s re­port to HHS on es­sen­tial health ben­e­fits last week is based on a sim­ple premise: Find what works al­ready and im­prove on it over time. Now a task that’s by no means sim­ple falls to HHS, which will de­velop the pro­posed and fi­nal rules that out­line what an es­sen­tial health ben­e­fits pack­age must in­clude and ex­clude for the sake of mak­ing the plans af­ford­able. Those choices are cer­tain to draw new bat­tle lines among providers, in­sur­ers, the Obama ad­min­is­tra­tion and law­mak­ers.

The IOM’s nearly 300-page re­port, Es­sen­tial Health Ben­e­fits: Bal­anc­ing Cov­er­age and Cost, is a re­sponse to HHS’ re­quest for the IOM’s rec­om­men­da­tions about the process the HHS sec­re­tary should use to de­fine and up­date the es­sen­tial health ben­e­fits pack­age. Out­lined in last year’s Pa­tient Pro­tec­tion and Af­ford­able Care Act, these ben­e­fits must be of­fered to in­di­vid­u­als and small groups in state-based ex­changes and the ex­ist­ing mar­ket. The law re­quires that plans cover at least 10 gen­eral cat­e­gories of health ser­vices (See chart) and be sim­i­lar to those cur­rently pro­vided by a typ­i­cal em­ployer. The IOM es­ti­mated that more than 68 mil­lion peo­ple will ob­tain in­sur­ance that must meet the re­quire­ments.

Julie Allen, govern­ment re­la­tions di­rec­tor at Drinker, Bid­dle & Reath in Washington, said she ex­pects a pro­posed rule by the end of this year, and that it won’t be overly pre­scrip­tive be­cause of the bal­anc­ing act re­quired. But what­ever HHS puts forth will draw a “tremen­dous amount of re­ac­tion,” she said, and there has been talk that a fi­nal rule might be pushed back un­til af­ter the 2012 elec­tions be­cause of the po­lit­i­cal im­pli­ca­tions at­tached to it.

For ex­am­ple, if the rule is very ro­bust, it could make plans too ex­pen­sive and not meet the law’s goal of cov­er­age and ac­cess for all. But if it’s too bare-boned, she said, then the pack­age could be viewed as depriv­ing mil­lions of peo­ple of the cov­er­age they need. The ad­min­is­tra­tion is at risk of crit­i­cism ei­ther way. “The prob­lem is state ex­changes are sup­posed to be ver­i­fied and ap­proved in Jan­uary 2013 and up and run­ning in 2014,” Allen said. “Your win­dow starts to shrink,” she added. “Some say they aren’t go­ing for­ward un­til they un­der­stand the rules—and this is a big one.”

Com­mit­tee mem­bers who worked on the re­port com­bined perspectives from four ar­eas—eco­nomics, ethics, ev­i­dence-based prac­tice and pop­u­la­tion health—to cre­ate what the IOM called an “over­ar­ch­ing frame­work” for HHS. The group then used that as a foun­da­tion to de­velop cri­te­ria that could help guide HHS in its de­ci­sions as it sought to achieve two aims: to pro­vide cov­er­age for a range of Amer­i­cans, and to en­sure the af­ford­abil­ity of that cov­er­age.

Christo­pher Koller, Rhode Is­land’s health in­sur­ance com­mis­sioner and a com­mit­tee mem­ber, said mem­bers fo­cused on how to build ben­e­fits that are based on re­search and ev­i­dence of what al­ready works. This con­cept is per­haps best seen in the com­mit­tee’s first of five rec­om­men­da­tions, which sug­gests the HHS sec­re­tary should es­tab­lish (by May 2012) an ini­tial health ben­e­fits pack­age that is guided by a national av­er­age premium tar­get. To do this, HHS should de­ter­mine what the national av­er­age premium of typ­i­cal small em­ployer plans would be in 2014 and en­sure that the es­sen­tial health ben­e­fits pack­age’s scope doesn’t ex­ceed this amount.

“We con­sid­ered a num­ber of dif­fer­ent ways to char­ac­ter­ize cost,” said El­iz­a­beth McG­lynn, a com­mit­tee mem­ber and an editor of the re­port who serves as di­rec­tor for Kaiser Per­ma­nente’s Cen­ter for Ef­fec­tive­ness & Safety Re­search. “We landed on pre­mi­ums be­cause we thought that was most un­der­stand­able to a wide range of peo­ple,” she said, adding that a premium


IOM com­mit­tee mem­bers dis­cussed their es­sen­tial ben­e­fits “frame­work” at a news brief­ing in Washington last week, rec­om­mend­ing that HHS set a premium tar­get for a health ben­e­fits pack­age.

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