ACA expected to cause few benefits disruptions
■ Concerns remain, however, that plans will offer narrower physician networks and less comprehensive benefits for children.
By Jennifer Lubell — Posted Sept. 2, 2013
Washington A Robert Wood Johnson Foundation report predicts that the Affordable Care Act’s implementation of minimum coverage requirements will result in few disruptions to current insurance markets, because insurers initially will be hesitant to implement alternatives to the benefits standards outlined by states’ baseline plans.
Qualified health plans on state health insurance exchanges, as well as some plans outside of the exchanges, are required starting in 2014 to offer essential health benefits packages that cover 10 broad categories of health care services. Each of the states had the option of choosing a benchmark plan among some of the most popular plans in their jurisdictions. Most states adopted the most broadly used small group plan as the benchmark, “presumably because they included state benefit mandates and a generous set of benefits,” said Timothy Jost, a professor at Virginia’s Washington and Lee University School of Law.
The foundation’s report looked at the implementation of the essential health benefits standards in five states: Alabama, Colorado, New Mexico, Oregon and Virginia. Researchers arrived at their findings by analyzing state guidance, regulations and legislation as well as by interviewing insurance industry officials and regulators from the respective states. While running into some technical problems and tight deadlines for submitting products to state regulators, insurers and officials alike in the five states showed a commitment toward moving product development and the review process forward, the report stated.
In most of the surveyed states, insurance officials reported that a shift to the essential health benefits standards would cause minimal disruption. States that already have pre-ACA benefits requirements in place, such as Colorado and New Mexico, will experience the fewest changes, the researchers noted. In Virginia’s case, the new benefit requirements are expected to result in broad expansions to its individual market. Maternity care, one of the 10 essential health benefits, never had been a traditional benefit for individual policyholders in the state, the report noted.
“Overall the states in our review are managing the shift to essential health benefits well,” said Andy Hyman, who leads coverage issues at the foundation, in a statement. “In these states, health plans offered through exchanges will offer coverage options that are comprehensive and high-quality, and will be offered at an affordable price.”
Most of the states will offer fairly robust essential health benefits plans, Jost said, and insurers don’t seem to be cutting back on services. They can substitute alternatives within a specific benefits category as long as they are providing a benefit that’s substantially equivalent to the benchmark. “There was some concern that they would try to manipulate that to attract healthier populations, but there’s not much indication that that’s happening, at least not in the first year,” Jost said.
Some states highlighted in the report have discouraged the substitution of benefits. Virginia officials, for example, told insurers that although the practice was permitted, “such substitutions may result in significant delays in the review of their form and rate filings.” Many of the insurers reported that substituting benefits wasn’t worth the trouble, because it presented too much of an administrative headache.
The hesitation on the part of insurers to substitute benefits means that “plans will closely resemble the benefits, limits, and exclusions prescribed in the benchmark package in the first year, with differences primarily reflected in cost-sharing and network design,” the report stated. However, it is an issue to keep track of as the burdens of implementing health system reform dissipate, the foundation report stated. Over time, insurers may want to use substitution as a means of differentiating their plans from those offered by other insurers, according to the findings.
Adequacy issues over benefits remain
Physicians didn’t get everything they wanted when the federal government issued final regulations on the essential health benefits earlier in 2013. Some medical organizations thought the options for children’s benefits in the benchmark plans could have been stronger.
The federal government did not end up heeding suggestions from the American Medical Association and the American Academy of Pediatrics to use Medicaid’s Early and Periodic Screening, Diagnostic and Treatment program to serve as the model for pediatric benefits. The medical organizations contended that EPSDT was more robust than many of the private options listed as state benchmarks. Medicaid never had been listed as one of the benchmark plan options available to states.
Concerns remain about the comprehensiveness of the pediatric dental and habilitative benefits, in that “there may be wiggle room for plans to offer pretty minimal services,” Jost said.
In Connecticut, it’s been the concern of some medical specialists in the state, including pediatric specialists, that certain care modalities may not be addressed adequately under the broad definition of essential health benefits, said Matthew Katz, executive vice president and CEO of the Connecticut State Medical Society. This could be a specific problem for patients that have certain chronic conditions or require specialized care, Katz said.
All patients should have coverage, “and patients need essential health benefits that are consistent across the board,” said Reid B. Blackwelder, MD, president-elect of the American Academy of Family Physicians. As long as these minimum coverage models use evidence-based processes for the benefits offered, “that’s what our members care about,” he said.
A related issue to the minimum coverage requirements is physician network adequacy on the exchanges, Jost said. “I’m hearing rumblings that plans are offering limited networks,” which means beneficiaries may have only a relatively small pool of physicians or facilities from which to choose. “There are requirements in terms of adequacy, but they are pretty loose,” he said.
The essential health benefits report was funded by the Robert Wood Johnson Foundation and prepared by researchers at the Urban Institute and the Center on Health Insurance Reforms, part of Georgetown University’s Health Policy Institute in Washington.