Essential Health Benefits in Illinois - What's Next?

In December 2011, the Department of Health and Human Services released long-awaited regulations on the Essential Health Benefits (EHB). A major piece of the Affordable Care Act, EHB will define the minimum level of coverage that must be offered in plans sold to individuals and small businesses both inside and outside the new health benefits exchanges. Although the hope was that the EHB regulations would create a minimum level of coverage that would ensure equal coverage for all who purchase health insurance, the Federal government handed off the responsibility of defining the EHBs to the states.

The December 16, 2011 bulletin that handed off that responsibility also provided some guidelines for how to go about doing that. The ACA determined that the EHB plan must cover benefits from 10 categories:

1. Ambulatory patient services
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance use disorder services, including behavioral health treatment
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventive and wellness services and chronic disease management, and
10. Pediatric services, including oral and vision care

Each state must select a health insurance plan currently operating within the state to act as the “benchmark” of services offered under the EHB. The state can choose from four types of existing health insurance plans:

• One of the three largest small group plans in the state; 
• One of the three largest state employee health plans; 
• One of the three largest federal employee health plan options; or 
• The largest HMO plan offered in the state’s commercial market.

If a state fails to establish a set of benefits that meets the criteria by the September 2012 deadline, the largest small group plan in that state will automatically become the benchmark.

The federal guidelines offer states a great deal of flexibility in defining their EHB plans. The plan that a state chooses will be supplemented to meet Federal standards before it is certified as the EHB plan. If, for instance, the selected benchmark plan is lacking coverage of the maternity category, the state would supplement by using the coverage of that category from another insurance plan currently available in that state. However, HHS offered no guidance as to which category certain benefits should be categorized under, leaving the content of categories a mystery.

Insurance companies, as well, have some flexibility in how they implement EHBs. Insurance plans must offer coverage that is “substantially equal” to the coverage offered in the benchmark plan. Also, insurance plans can modify the coverage they offer within a category, and potentially between categories, as long as the federal government does not see the modification as a reduction in value of coverage.


How Will Illinois Define its Essential Health Benefits?

It is not yet clear what the Illinois EHB or benchmark plan will look like. Illinois’ listing in the report of each states’ three largest small business plans, released by HHS for the purposes of selecting a benchmark, is constituted by three plans offered by Blue Cross Blue Shield of Illinois: BlueAdvantage Entrpreneur PPO, BlueEdge HSA, and BluePrint PPO. However the federal government has not yet approved the pool of eligible benchmark plans for the state of Illinois. In some states, comparison of potentially eligible plans has revealed that most of these plans offer comparable coverage, but it is still unclear if that holds true for Illinois. Also, it is not clear if Illinois plans to define the state’s EHB and benchmark plans itself, or to default to the federal government.

Advocates in Illinois have begun the conversation around the issue of the state’s EHB plan. The American Cancer Society, with assistance from other advocacy groups, has called for the Illinois Department of Insurance to clarify the levels of coverage offered in the plans that will constitute the pool of possible plans: They have specifically asked for information on any non-monetary coverage limits that may exist in those possible plans, and have developed a survey tool that highlights 31 areas of coverage, in an attempt to what the Illinois benchmark plan could look like, and to better develop advocacy efforts in favor of a more comprehensive set of EHBs.

Check back here for additional news on Essential Health Benefits in Illinois...decisions have to be made by states by September 2012!