JoAnn Volk

Georgetown University

Health Policy Institute

March 15, 2012

Health Reform in Your Backyard

Webinar ProducersGeorgetown University Health Policy Institute

American Plasma Users Coalition (A-PLUS)Alpha-1 AssociationAlpha-1 FoundationGBS/CIDP Foundation InternationalCommittee of Ten ThousandHemophilia Federation of America Immune Deficiency FoundationJeffrey Modell FoundationNational Hemophilia FoundationPlatelet Disorder Support AssociationPatient Services Incorporated

Program Sponsors

Supporting Sponsors

Lead Sponsors

Objectives of this SeriesTo help advocates understand how the

Affordable Care Act (ACA) will affect their care

To help advocates understand what the ACA will mean for health care in their state

To arm advocates with the tools they need to make sure ACA implementation in their state meets the needs of patients

Objectives of this WebinarBegin developing the skills and expertise for state advocates

Provide an overview of Essential Health Benefits (EHB) as set forth in the ACA

 Discuss requirements for health benefit plan design Provide an overview of the federal Department of Health and

Human Services (HHS) guidance to states  Outline patient concerns with the approach set forth in the

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Goals of the ACAImprove health coverage for those who have

insurance, includingExpand coverage to dependents up to age 26Prohibit annual and lifetime limitsPut limits on how insurers can set premiums

Improve health care qualityExpand coverage to those without insurance

Reduce the number of uninsured by 32 million

Overview of Essential Health Benefits

in Health Reform ACA to expand coverage to those without and

to improve coverage for those who have itEHB part of both those goals:

Set standard for coverage that is adequateAllow consumers to compare plans and

understand benefitsProtect against insurers using benefit design to

avoid higher cost patients

Requirements for Health CoverageLaw lists 10 broad categories:

Ambulatory patient services (i.e., doctor visits);Emergency services; Hospitalization; Maternity and newborn care; Mental health and substance abuse disorder services,

including behavioral health treatment; Prescription drugs; Rehabilitative and habilitative services and devices; Laboratory services; Preventive and wellness and chronic disease management

services; Pediatric services, including oral and vision care.

Other Requirements under the LawEHB should be similar to “typical employer plan”All new plans in individual and small group

market must offer EHB (not large group plans, self insured or “grandfathered” plans)

The law’s limits on out-of-pocket costs and prohibition against annual and lifetime limits apply only to the EHB

EHB only includes the services and benefits to be covered. It does not address what patients will pay out of pocket for those benefits and services.

Other Requirements Under the LawWhen defining EHB, federal and state officials must

consider:Whether there is an appropriate balance among

categories (ie, sicker patients should not get less)Whether the benefit design would discriminate against

individuals because of their age, disability, or expected length of life

The health care needs of diverse segments of the population

When essential benefits are defined, if services provided can be denied based on age, expected length of life, disability, degree of medical dependency or quality of life

Requirements for HHS Under the LawHealth and Human Services must periodically

review the EHB and report to Congress:If patients are having difficulty accessing

needed services for reasons of cost or coverageIf the EHB should be updated to take into

account new treatment or medical advancements, and how

And whether adding benefits to the EHB would increase costs or affect the “actuarial value” of the benefit (ie, how much of the services are covered by the plan rather than the patient)

A Note About Cost-SharingOne term used throughout the ACA is

“actuarial value,” which is a measure of how much a plan will pay for services vs. how much a patient will pay (on average)

The 4 tiers of coverage in the ACA are based on this measure: bronze, silver, gold, platinum

A bronze plan (60% actuarial value) will require patients to pay more out of pocket than a platinum plan (90% actuarial value)

Process to DateDept. of Labor study of “typical employer

plan” wasn’t all that usefulInstitute of Medicine report on process would

have presented other problems for patients:Dismissive of state mandatesSuggested premium be the starting point, not

the benefits people need HHS listening sessions with consumers,

providers, employers and plans

HHS Proposal: Why the State-Based Approach?HHS study of benefits currently offered to

small businesses, state employees and federal employees plans found similar benefits with a few exceptions:

Services covered because of state law: IVF, certain treatments for autism

Services covered in plans that don’t have to comply with state insurance law: mental health/substance abuse services, pediatric vision and oral services, habilitative services

Differences in plans were typically in how much patients pay out of pocket

What did HHS Propose?Each state will choose one EHB from among 10

plans that are currently in the state:Largest plan by enrollment in any of the top 3

small group market productsAny of the largest 3 state employee plansAny of the largest 3 federal employee plansLargest insured commercial non-Medicaid HMO

These existing plans – known as benchmark plans - include not just services/treatments covered but any limits that may apply (ie, visit limits)

HHS Proposal, cont’dIf a benchmark doesn’t cover all 10 categories

required under the ACA, benefits must be added

If a benchmark doesn’t include coverage required by state law (state mandates), a state can add it to their EHB at state cost for those in “qualified health plans” (whether subsidized or not)

If state does not choose an EHB, the default plan will be largest plan by enrollment in largest product in small group market

HHS Proposal, cont’dInsurers may have flexibility to offer benefits that

are similar to but not exactly the same as the EHBThey may do substitutions of coverage within a

category, changing the actual services covered and any visit limits

They may do substitutions across all 10 categoriesThe only limit on substitutions is that they must be

roughly the same in value as the EHBInsurers have flexibility to offer prescription

benefit lower than the EHB: one or more per class rather than 2 or more

Where Proposal Falls Short on the Process for Picking an EHBGetting the information on benchmark plans

Hard to know what the top 3 plans in each market are; HHS released top 3 plans in small group market based on 2011 data – but this is first step only

Really need to know what plans cover – and for that you need detailed plan documents

EHB can change as benchmarks changeUnclear where decision will be made in stateEnforcement becomes big concern: how do

you know states and insurers are meeting the requirements of the ACA

Where the Proposal Falls Short on What the EHB Will BeWeakens key goals of EHB

To set minimum standard for coverageTo provide greater transparency in insurance and

make it easier to compare plansInsurer flexibility may create problems for people

with serious and chronic diseasesOpens door to insurers using benefit design to avoid

the sick – especially with other 2014 reforms in placeCreates more confusion and uncertainty for consumers Prescription benefit requirement is not as strong as

Medicare and not as strong as currently exists in private market

What Can State Advocates Do?Requests to state:

State must use transparent process to choose EHB Make clear the factors state will use in making a

choice Allow for public input

Make publicly available plan documents for each benchmark option – to know in detail what is covered and what is not

Ensure enforcement of patient protections and other ACA requirements

What Can State Advocates Do?Review plan documents to ensure services,

treatments and therapies are coveredDo categories of service line up with ACA list

of 10 benefit categories?What limits are in plans?

Other considerations: Stability of coverage: year to year changes?Implications of adding benefits: What is effect

on other benefits? What gets squeezed down or out?

What Can State Advocates Do?Engage allies if key decision-makers aren’t

responsive to your needs and requestsOther patient groups can help with top line

requests (plan data, open process)Allies in legislative or executive branches can

help flush out where and when decisions madeProvide feedback to national chapters and

organizations to help identify best practices and successful approaches