Essential Health Benefits: Getting Specific, Getting Prepared Christopher F. Koller Health Insurance Commissioner, State of RI NASHP Annual Meeting October 3, 2011

Agenda What does ACA say about EHB’s? Let’s set a baseline –Populations directly affected by EHB definition –Some definitions Lessons from IOM Committee Timelines Implications for States: Our Speakers 2

EHB’s in Affordable Care Act Intent: Answer the question – What constitutes the health insurance every one is to buy in ACA? Relevant Section: 1302 EHB’s are “to be defined by Secretary of HHS” 3

EHB’s in Affordable Care Act The Statutory Guidance Conflict in 1302: 4 “At least the following categories and the items and services covered with in 1.Ambulatory Patient Services 2.Emergency Services 3.Hospitalization 4.Maternity and newborn care 5.Mental Health and Substance Abuse Disorder Services 6.Prescription Drugs 7.Rehabilitative and habilitative services and devices 8.Laboratory Services 9.Preventive and wellness services and chronic disease management 10.Pediatric Services, including oral and vision care” vs “The Secretary shall ensure that the scope of essential health benefits..is equal to the scope of benefits under a typical employer plan as determined by the Secretary”

EHB’s in Affordable Care Act “Required Elements for Consideration” (in Section 1302) Appropriate balance between categories Non discrimination in design and administration of benefits based on age, disability or life expectancy Take into account healthcare needs of diverse segments of population Ensure the EHB’s are not denied based age, length of life, present or predicted disability, degree of medical dependency, or quality of life Must cover emergency treatment in and out of network (dental plans and full health plans) Periodic reviews, reports and updates 5

EHB’s in Affordable Care Act Statutory Strategy “The Secretary shall…” Strategic vagueness and principles (that appear to conflict in places) Contrast this to negotiating a list in statute (Clinton reform strategy) In hindsight – a little bit of structure and process in statute would have been helpful… – Federalism? 6

EHB’s: What populations are directly affected by this determination? Inside the ExchangeOutside the Exchange Individual MarketYes Small Group MarketYes Large Group and Self Insured (N/a)No MedicaidOnly Medicaid Benchmark Plans Basic Health PlansYes 7

EHB’s: the floor or the room? Employers may always choose to cover more than the EHB package But the federal government will only subsidize insurance in the Exchange at the EHB level; and The state is fully responsible for the costs of benefits in the Exchange beyond the EHB level for subsidy recipients Implications – great pressure on state mandates not in EHB package - Significant influence in EHB definition on market 8

“What’s Covered”: Getting the Language Straight “Covered Services” “Benefit Design”“Benefit Administration” What is it The list of services to be paid for Terms and conditions of coverage How those terms and conditions are administered Examples Usually broad and vague inclusions and very specific exclusions Medical Necessity Cost sharing Visit Limits Network limitations Prior Authorization Claims Payment rules Plan Policies and Procedures Medical Management guidelines Medical Necessity determination Public Oversight Examples EHB definition State Mandates MH Parity Medicare and Medicaid State law – coverage minimums Federal law – “Precious metals”, external appeals Public Contracts Exchange terms State Law – UR certification Internal Appeals, prompt payment Federal Law – External appeals Industry standards - NCQA ACA “oppor- tunity” Standardized, rational, sustainable definitions through EHB process Standardized oversight through exchanges and Medicaid managed care QHP certification in exchanges. 9

Institutes of Medicine EHB Committee Charge from Assistant Secretary for Planning and Evaluation for HHS: – Recommend to the secretary a process for determining EHB’s – How to take into account “required elements for consideration” – Thoughts on medical necessity – Take in public comment on defining and updating EHB’s Composition – State officials, industry, academia, providers, consumers 10

IOM Committee: Issues in Defining EHB – from public comment process 1.Balancing generosity and affordability: base line package and changes over time 2.Defining a “typical” employer. 3.Evaluating state mandates 4.Considering specificity and flexibility in EHB guidance. 5.Determining medical necessity 6.Applying evidence and encouraging innovation (in benefit coverage, design and administration) 7. Protecting patients – applying “required elements” 8.Ensuring fair processes—public engagement, independence of decision makers, and transparency of information used when making benefit decisions were all considered fundamental. 11

EHB Milestones Very soon: IOM report to Secretary Secretary gives draft guidance to states and exchanges States have to implement – Commercial Market/ Statutory mandates (2012 legislative session?) – Medicaid Programs – Exchange Programs (as needed) – Stakeholder education 12

Remainder of Session Perspectives for States: – Medicaid Programs – Commercial Markets – Sustainability and Coordination across Covered Populations “States should count on a lot of terrifically hard and terribly important work.” 13