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Essential Health Benefits: What They Are and What’s Covered

 

 

Transcript:
This week in Washington—the essential health benefits package covers specific categories of care. You are tuning in to the health policy update from America’s Essential Hospitals for the week of July 29.

As we discussed in previous podcasts, exchanges are health insurance marketplaces where some people can purchase coverage with the help of subsidies. In this podcast, we focus on benefits covered by health insurance plans sold through the exchanges.

The Affordable Care Act (ACA) requires that health insurance plans cover at least a minimum package of services, called the essential health benefits. Plans also must limit the amount of cost-sharing required for these services.

The essential health benefits (EHB) package refers to certain categories of care that must be covered by plans offered through the exchanges.

The 10 categories of care include: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health benefits and substance use disorder services, prescription drugs, rehabilitative and habilitative services and devices and laboratory services. It also covers preventive and wellness services and chronic disease management, as well as pediatric services including oral and vision care.

The exact benefits offered within each of these categories has been defined by individual states. Each state’s EHB benchmark plans could be based on certain state plans, any of the largest three national federal employee health plans, or the largest commercial HMO plan operating in the state. EHB benchmark plans will apply for 2014 and 2015 so that benefits can be revised, if needed, for 2016. States can also mandate certain benefits be covered that are not included in the EHB benchmark plan. In addition, Medicaid plans must cover the EHB benchmark plan.

The benefits covered by EHB benchmark plans include many services that are critical to vulnerable patients, like hospitalization and prescription drugs, but the plans may not include all of the services that are needed to ensure high-quality care for this population.

Essential hospitals serve people experiencing multiple chronic conditions, behavioral health issues, homelessness and language barriers that often require more resources and care management services to improve outcomes. Many of the services needed, such as support services to help people transition out of the hospital, education services for patients with lower levels of health literacy, and interpreter services, are not specifically designated as an EHB category of care and may not be covered by state benchmark plans.

In addition, there is concern that more cost-sharing assistance should be available to ensure that all of the costs of care are covered. For example, people with low incomes will likely enroll in plans offering lower monthly premiums, but requiring higher amounts of cost sharing—up to 40 percent of total cost of care. This presents a risk that enrollees will not have the money to cover out-of-pocket costs when they arise, leaving hospitals with unpaid cost-sharing for covered services.

The reality is that some necessary services aren’t included in the 10 categories of essential health benefits. Patients will be responsible for significant amounts of their cost of care, meaning financial challenges will remain for essential hospitals that provide care to vulnerable, low-income patients. Many hospitals will face uncompensated costs of uncovered services and unpaid cost-sharing for covered services. To reduce these uncompensated and uncovered costs, a broad range of services such as coordination programs, care management services and language services must be available and affordable.

Thanks for listening to another edition of This Week in Washington. I’m Erin Richardson; join us next week as we continue our discussion of health insurance exchanges.

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