The Essential Health Benefit: Could a 'minimal' benefit vanish altogether?

Just a few short weeks ago, I wondered in an earlier piece whether the essential health benefit might in fact become a “minimal” health benefit. At that time, I was very concerned about the recent Institute of Medicine report to HHS, which recommended that the Department use a typical small-business health insurance benefit plan as the standard for defining the Essential Health Benefit (EHB) required by the Affordable Care Act (ACA).

While the ACA requires the EHB to include benefits for mental health and substance use care, and these benefits must be at parity, small business plans often do not include behavioral health benefits and when they do, they are almost never at parity. Hence, small business plans are inadequate as a standard for the EHB.  

The EHB is important because it will be used not only as the “floor” health insurance plan for the state Medicaid expansion (providing health coverage for those with incomes up to 133% of the Federal Poverty Limit), but also as the “floor” plan for plans offered in each state’s health insurance exchange (providing coverage with subsidies for those with incomes from 134 to 400% of FPL).

And, of those who will be newly eligible for coverage, we know that 10.5 million have an existing mental health or substance use condition, and of these:

• virtually all to be covered in the state Medicaid expansion will require services equal to those currently provided to consumers in the public mental health/substance use care systems.

• most covered by the state health insurance exchanges will need that same level of care as well.

With the December 15 release of the Essential Health Benefit recommendation from HHS, I became even more concerned because HHS did not develop a standard for the Essential Health Benefit. Instead, HHS recommended that each state establish its own EHB by choosing among four existing plans:

• the Federal Employee Health Benefit Plan (FEHBP)
• the state employee health benefit plan
• the health benefit plan of the three largest small businesses in the state
• or the health benefit plan from the largest Health Maintenance Organization in the state.

In making its EHB decision, each of the 50 states will have to face conflict between its own financial interests—and the public health interest of its citizens, and the financial interests of its own business community. Here’s why:

• The amount of federal money a state will receive will be defined by the value of the floor EHB.  (Note: Value in this case is “actuarial value,” calculated as the total dollar cost of care for a “standard” individual or population that is covered by the plan, versus paid for by the individual through deductibles, co-pays, etc.)

• The value of the EHB selected will define the costs of the state’s own contribution to its Medicaid expansion after the period 2014-2018 when the federal match covers the full cost of the expansion. And, the value of the EHB will also determine the value of the personal subsidy for each individual who participates in the state’s insurance exchange, which is available to all individuals with incomes up to 400% of FPL.

• Yet, a higher value EHB could raise the ire of a state’s business community, since it will require those employers and employees who participate in the state exchange to pay more for the more valuable EHB coverage selected by the state.

While the HHS EHB recommendation may be politically expedient, since it blunts criticism of the ACA, it does nothing to promote adequate or uniform mental health or substance use care benefits. In an era when improved science and more evidence-based practices should move standards of care toward greater uniformity and quality, the HHS approach promotes disparity. This approach makes it likely that a person in one state will be covered to receive a required, evidence-based practice, while a person in an adjacent state with the same condition will not receive coverage for that practice. To me, this disparity makes very little sense.

And, although states may be confronted with the dilemma of deciding between more federal funding and more complaints from their local business community, I suspect that they will take action to avoid the ire of their local business community. This will result in a choice among the permitted standards that minimizes the financial value of the floor EHB in most states. As a consequence, mental health and substance use care benefits will likely be minimized, or may vanish altogether, in those states.

What can you do?  HHS is soliciting comments until the end of January on its recommended approach. If you believe as I do that the HHS approach will result in minimal or vanishing mental health and substance use care benefits in the state EHBs, you must express your opinion to HHS on this issue—no later than January 31. We need all voices from our fields joined in unison to support good mental health and substance use care going forward.