2:44pm

Fri December 16, 2011
Shots - Health Blog

States Would Get More Flexibility On 'Essential Benefits' Under Proposal

Originally published on Fri December 16, 2011 2:46 pm

It may or may not be a punt, but the Obama administration wants to let states play a bigger role in deciding what constitutes an "essential health benefits" package when it comes to health insurance.

The Department of Health and Human Services issued what it called a "bulletin" outlining a policy it hopes to impose. In other words, it's not even yet a formal regulation.

The idea is to give states "more flexibility and freedom" to implement the part of the health law that includes the essential health benefits requirement. Under the proposal, rather than having the federal government set a package of benefits for plans sold to individuals and small businesses, states could match the benefits of specified plans currently available to their residents.

States would choose a "benchmark" plan from one of these groups:

  • The three largest small group plans in the state by enrollment.
  • The three largest health plans available to state employees.
  • The three largest health plans available to federal workers.
  • The largest HMO offered in the state's commercial market.

"This is the latest step we're taking, in partnership with the states, to ensure that all Americans have access to quality, affordable coverage," HHS Secretary Kathleen Sebelius told reporters on a conference call.

The concern with the requirement for essential health benefits comes down to this: One goal of the federal Affordable Care Act is to ensure that insurance be comprehensive enough that people get care they need, but that coverage must remain affordable.

"And we've acknowledged many times, coverage that works in Florida may not work in Nebraska," Sebelius said.

But the proposal, which is open to public comment until the end of January, is already drawing criticism from those who think it goes too far and those who think it doesn't go far enough.

Debra Ness, President of the National Partnership for Women and Families, called the proposal "deeply disappointing" and said it "jeopardizes the promise of health reform for millions of women and families." The partnership is worried that by "failing to provide specific standards on what the maternity coverage required under the law must include, HHS allows plans to continue offering substandard coverage that fails to meet women's needs."

Meanwhile, Utah Sen. Orrin Hatch, the ranking Republican on the Senate Finance Committee and an opponent of the health law, said the proposal will cause premiums to rise.

"The framework proposed by the administration takes away the right of individuals to choose the health care plan that best fits their needs," Hatch said.

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