Essential Health Benefits: Balancing Affordability and Adequacy Kavita Patel MD, MS Engelberg Center for Health Care Reform The Brookings Institution February 3, 2012 Washington, DC

Issues to Consideration Legislative Intent- set floor not ceiling? This is NOT benefit design (next slide) or benefit administration –Outstanding issues around cost containment strategies, alignment with delivery systems Governance/Administration –Medical necessity –Basis for evidence review, etc –Oversight and monitoring –Premium Issues 2

Various Benchmark Plans 3 Annual Deductible Copays for Office Visits Coinsurance for Hospital Coinsurance for Lab and X- RayPrescriptions Benchmark Plan Small Group Insurance Products in States Small Group Market $ $3020% Tiered copay for prescriptions ($10 for generic, $25 for brand- name drugs on the plans formulary, $50 for brand-name drugs not on the formulary) State Employee Health Benefit Plan (Colorado State Plan) $1,500$3020% Tiered copay for prescriptions ($10 for generic, $25 for brand- name drugs on the plans formulary, $50 for brand-name drugs not on the formulary) Federal Employee Health Benefit Plan $350$15 $100 plus 15% coinsurance 15% 15% coinsurance for generic prescription drugs, higher for non-generics Commercial Non- Medicaid HMO in State no deductible$20$250 No cost-sharing for lab or x-ray Three tiers of copayments for prescription drugs ($10 for generic, $25 for brand-name drugs on the plans formulary, $50 for brand-name drugs not on the formulary)

4 Implications for Various Stakeholders States –Variations in benefits and access to elements of care including behavioral health treatment, habilitative services, and routine pediatric oral/vision care –Legislative complications Insurers –Flexibility –Lack of uniform standard Patients and Families –Provide consumer feedback Policymakers –Oversight and guidance for exchanges –Appeals process

Opportunities for Various Stakeholders Researchers –Development of methods for comparative effectiveness research –Better understanding of rapid cycle evaluation and its role in modifying an EHB at a federal and state level Health Care Leaders –Act as the catalyst behind CMMIs pilots and evaluation efforts –Affordability State-Based Exchanges –Laboratories for initiatives –Increase consumer engagement 5

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