HHS Punts on Essential Health Benefits Decision

The bulletin is not HHS's final word on essential health benefits. It's more of a trial balloon or a test of just what will fly and what won't.

The IOM's cost strategy looked at what a typical small business would pay for health insurance coverage in 2014 if healthcare reform wasn't in effect and suggested fitting essential benefits into that payment structure. Ball explained that the committee heard complaints about the skimpy health insurance plans offered by some small employers and thought that this approach would help make sure employees were paying for meaningful health insurance coverage.

In regard to the HHS bulletin, Ball said, "the issue of cost still very much needs to be addressed." He noted that HHS promises to revisit the issue in 2016 so "everyone will have another chance to look at costs."

The PPACA specifies 10 broad categories of medical care that must have their essential benefits defined:

• Ambulatory patient services
• Emergency services
• Hospitalization
• Lab services,
• Maternity and newborn care
• Mental health and substance use disorder services
• Pediatric services, including oral and vision care
• Prescription drugs
• Preventive and wellness services, including chronic disease management
• Rehabilitative and habilitative services and devices

The Department of Labor took its own swing at the essential healthcare benefits effort in April 2011. Its report was barely acknowledged by HHS. Meanwhile, trade groups and lobbyist dismissed the DOL effort as irrelevant and minimalist after noting that the report was skewed toward benefits offered by large employers and had little application to individuals and small groups.

The IOM's 18-person committee composed of academics, actuaries, health system executives, health insurers and policy wonks was charged not with defining the benefits, but rather with recommending a set of criteria and methods for HHS to use in deciding the actual list of essential benefits.