CMS Rule Weakens Essential Health Benefits Requirement
On Monday, the Centers for Medicare and Medicaid Services (CMS) released the final 2018 health insurance marketplace rule, which includes proposals affecting the individual and small group markets. Overall, the rule shifts decision making authority for several significant exchange policies to the states, including the scope of the Essential Health Benefits (EHB). Most importantly, the EHB changes will allow states to choose less comprehensive coverage for mental health and addiction services, hindering patient access to care and raising out-of-pocket costs for many consumers.
The Essential Health Benefits requirement, which applies to health plans sold on the federal and state exchanges, ensures that health plans provide comprehensive coverage that includes mental health and addiction services. The final rule will 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.
The National Council spoke out against this proposal in official comments to CMS in November 2017. In the comments, National Council explained that the new EHB selection process would 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 addiction. The National Council is disappointed to see this provision retained in the final rule as it will likely roll back notable improvements in coverage of mental health and addiction services in most private insurance plans.
As highlighted in this CMS fact sheet, states’ EHB options now include the following approaches:
- Select from the 50 EHB-benchmark plans that other states used for the 2017 plan year;
- Pick and choose one or more EHB categories from another state’s benchmark plan; or
- Create a new benefit plan from scratch by selecting a set of benefits that would become the state’s EHB-benchmark plan. The plan is to be in line with the “typical employer plan.”
States’ default option would be their current benchmark plan, and no action would be necessary to continue with that option. CMS stressed that states may wish to consider a variety of different factors when selecting an EHB benchmark plan, including the impact of the EHB-benchmark plan’s scope of benefits on the availability of subsidies for enrollees in the state, the impact on Medicaid, and on large group and self-insured group health plans.
States need to submit documents for their EHB-benchmark plan by July 2, 2018 for the 2020 plan year.