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Stephanie Pellitt

Policy and Advocacy Associate

National Council Opposes Proposal to Weaken Essential Health Benefits

November 30, 2017 | Health Insurance Exchanges | Comments
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On Monday, the National Council submitted comments to the Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services (HHS) regarding proposed changes to the Essential Health Benefits (EHB) for marketplace insurance plans. The proposed changes would allow states to choose less comprehensive coverage for mental health and substance use services, which would hurt patient care and raise their out-of-pocket costs. The National Council expressed strong opposition to this proposal and other EHB changes in addition to reiterating support for including prescription drug utilization in the Risk Adjustment Model.

Essential Health Benefits

The proposed rule would dramatically change the way states select their Essential Health Benefits by allowing states to choose plans (and benefit categories) from other states, or to create a new benefit plan from scratch for health plans sold on the individual marketplace. In official comments, the National Council explains that this new EHB selection process will lead to a race to the bottom across states, encouraging states to pursue less generous and more narrow benefit designs that will increasingly harm and discriminate against consumers facing mental illness and/or substance use disorders. The current process for state selection of Essential Health Benefits has led to greatly improved coverage of mental health and substance use disorders in most private insurance plans and therefore should be maintained. The National Council urges the federal government to reject any approach that diminishes the scope and benefits of EHB benchmark plans.

The National Council further urged CMS/HHS to reject the following provisions that could also limit coverage of mental health and substance use services including:

  • Definition of a Typical Employer Plan: The National Council is deeply concerned that HHS’s proposed definition of a typical employer plan would create a loophole for states to select a benchmark plan that limits certain services. For example, states could choose a benchmark with minimal mental health and substance use disorders benefits, leaving consumers with a plan that does not cover prescriptions for medication-assisted treatment (MAT) or one that limits residential treatment days.
  • Benefit Substitution: The National Council is concerned about HHS’s proposal to allow benefit substitution between different legally required EHB categories. If insurers are allowed to swap within and across benefit categories, even if the insurance has the same actuarial value, consumers will be left with gaps in coverage. For example, hospital care and rehabilitative care could be limited while outpatient visits are enhanced.
  • Future Proposal to Develop a “Federal default definition of essential health benefits”: HHS is also considering developing a “federal default definition of essential health benefits,” which could include a “national benchmark plan standard for prescription drugs” that would limit states’ flexibility to select prescription drug or other benefit category benchmarks that best meet the needs of their populations. The National Council is concerned that the national standard would lead to limits in beneficiary benefits and increased patient cost-sharing. Moreover, this approach raises a red flag that the “federal default” under consideration would not be expansive enough to meet the needs of people living with serious and chronic conditions like mental illness or substance use disorders.

Modifying the Risk Adjustment Model to Include Prescription Drug Costs

In its comments, the National Council reiterated strong support for including prescription drug utilization in the Risk Adjustment Model as a way to help ensure patients with pre-existing, chronic conditions have health coverage. Despite the Affordable Care Act’s goal to end discrimination based on pre-existing conditions, many health insurance plans currently engage in practices that enable them to avoid patients with serious and chronic conditions. The National Council believes that compensating issuers through mechanisms like risk adjusters for their enrollees who need and use higher-cost prescription medications will encourage issuers to take responsibility for caring for these patients, remove incentives for avoiding the sickest patients, and reduce discriminatory practices that prevent vulnerable populations from accessing care and treatment.

Read the National Council’s full comments here.