As the process to repeal the Affordable Care Act progresses, Americans are waiting to see whether the American Health Care Act proposal by House Republican will replace the current law requiring insurers to protect consumers with a minimum package of health benefits included in the ACA.
In a recent press conference discussing the AHCA, Health and Human Services Secretary Tom Price said the administration and Congress will take “additional steps to change the health law.” But so far, replacement proposals have not included this feature.
According to a Commonwealth Fund study, the steps Price referred to may include removing the 10 “essential health benefit” requirements, which would give insurers “more flexibility to exclude benefits and leave enrollees without coverage for the health care services they need.”
The ACA health benefits for the individual market are less comprehensive than coverage for large company employees; however, they compensate by making the individual-market insurance more robust. This specific portion of the ACA requires insurance plans to cover 10 categories of essential health benefits: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventative and wellness services, and pediatric services.
Commonwealth reports requiring essential health benefit regulations give states flexibility to choose from existing health plans. Coined the Essential Health Benefit benchmark, this small-group plan acts as an example for states to identify their own benefit benchmark.
This did not exist prior to the ACA. Most individual market plans included a few of the 10 essential health benefits, but not only were they not as robust, oftentimes the benefits had monetary limitations. The two-fold issue of fewer services being covered, and higher cost-sharing, left more than 50 percent of Americans with health coverage through the individual insurance market in 2010—before the ACA rules went into effect—with plans that would not have qualified to be sold in the individual market under the ACA, according to Commonwealth.
Looking forward, if the essential health benefits are repealed and replaced with AHCHA policies that do not include a minimum federal benchmark, consumers will experience a return to the previous patchwork system, where, according to Commonwealth, “a person’s coverage varies widely depending on where they live.” Moreover, insurers will have too much flexibility to create plans in favor of healthy individuals and to exclude coverage for essential health services. This may result in burdening consumers with financial costs for illness or injury as a result of policies that purport to, but don’t actually, provide full coverage.
Steve Love, DFW Hospital Council president, says the real test of any insurance product is the actuarial test regarding the spreading of risks.
“For example, plans need healthy participants, generally younger people, to help spread/absorb the risks associated with sicker individuals,” Love told D CEO Healthcare. “We spread the expense of chronic illness like diabetes, cancer and heart disease across the entire patient population pool. When we start cherry-picking essential health benefits like maternity, mental illness, and other coverages by removing them from the total population pool, we generally create hardships for someone in the form of no coverage or higher out-of-pocket costs. We need to be extremely careful as we modify essential health benefits, because we are impacting the treatment of many individuals.”