AHIP Weighs in on the Costs of Essential Health Benefits Coverage

Although the Affordable Care Act (ACA) (P.L. 111-148) requires health plans to provide coverage of a list of 10 categories of benefits would at least, in theory, be well-received by consumers, employers and insured, alike, may not be so keen on the mandate. Not all of these benefits have been traditionally provided by health plans, and the addition of them requires a higher premium.

America’s Health Insurance Plans (AHIP),  a national trade association representing the health insurance industry, recently released a fact sheet entitled “Fact Check: Essential Health Benefits,” discussing how this requirement affects individuals and small businesses. [The fact sheet is available from the AHIP essential benefits site.] AHIP claims that “millions of Americans will have to ‘buy up’ to meet the additional coverage requirements.”

The 10 categories of benefits that health plans are required, at the very minimum, to provide are as follows:

  • Maternity and newborn care (care before and after baby is born)
  • Hospitalization (e.g., surgery)
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Pediatric services
  • Prescription drugs
  • Mental health and substance use disorder services, including behavioral health treatment
  • Ambulatory patient services (outpatient care, no hospital admittance)
  • Preventive and wellness services and chronic disease management
  • Emergency services

AHIP also cites to other “minimum coverage requirements” that have become effective that will further increase coverage costs. One such requirement being the minimum actuarial value, or the various tiers of coverage sold on the exchanges, which requires that the most affordable tier, bronze coverage, which will have a minimum actuarial value of 60 percent, and the consumer will pay 40 percent of the cost. Other requirements are the “first-dollar coverage” for preventive care and no annual or lifetime limits on coverage.

AHIP stresses in its fact sheet that affordability is key, and suggests that states be given the flexibility to create the most affordable options for its consumers and employers.

Critics. AHIP, however, cited in part to a 2009 (pre-ACA) Congressional Budget Office analysis in stating that “premiums would increase because policies ‘would cover a substantially larger share of enrollees’ costs for health care (on average) and a slightly wider range of benefits.'” Also providing support to its argument, AHIP quoted Johnathan Gruber from MIT, an economist and consultant with the Obama Administration, as saying, “HHS cannot both make the plans extremely generous, and also make them affordable so that they cover millions of Americans. Those goals contradict each other.”